A wood-rot fungus was isolated and investigated for its laccase production in submerged cultures. Based on sequence comparison and phylogenetic analysis of the 18S rDNA genes with reference taxa, the wild-type strain HLS-2 with high laccase production was identified as Psathyrella candolleana with GenBank Accession no. HQ215597. The production of laccase by P. candolleana HLS-2 can be enhanced by adding several agricultural wastes to the medium. Among them, wheat bran had the most significant effect and the highest laccase activity of nearly 12000 U/L. Extracellular laccase formations by this fungus can also be induced by veratryl alcohol, guaiacol, vanillic acid, coumaric acid, 2-2’-azinobis(3-ethyl- benzthiazoline-6-sulfonate) (ABTS), and copper sulfate. The maximal laccase activity, approximately 23000 U/L, was obtained from the shake-flask culture containing 1 mM Cu2+ without phenolic or aromatic inducers. Laccase activity of the extracellular liquid was stable at pH 8.0 and retained over 90% activity at 4 °C after 40 days.