A novel bifunctional catalase with an additional phenol oxidase activity was isolated from a thermophilic fungus, Scytalidium thermophilum. This extracellular enzyme was purified ca. 10-fold with 46% yield and was biochemically characterized. The enzyme contains heme and has a molecular weight of 320 kDa with four 80 kDa subunits and an isoelectric point of 5.0. Catalase and phenol oxidase activities were most stable at pH 7.0. The activation energies of catalase and phenol oxidase activities of the enzyme were found to be 2.7 +/- 0.2 and 10.1 +/- 0.4 kcal/mol, respectively. The pure enzyme can oxidize o-diphenols such as catechol, caffeic acid, and L-DOPA in the absence of hydrogen peroxide and the highest oxidase activity is observed against catechol. No activity is detected against tyrosine and common laccase substrates such as ABTS and syringaldazine with the exception of weak activity with p-hydroquinone. Common catechol oxidase inhibitors, salicylhydroxamic acid and p-coumaric acid, inhibit the oxidase activity. Catechol oxidation activity was also detected in three other catalases tested, from Aspergillus niger, human erythrocyte, and bovine liver, suggesting that this dual catalase-phenol oxidase activity may be a common feature of catalases.