Biotechnology promises new approaches for the pulp and paper industry. Practical applications of biodelignification, i.e. removal of lignin by microorganisms in pulping, bleaching and decolourisation of lignin derived effluents hold great promise for future use in the industry. Research in this area has accelerated during the past decade following advances in understanding of wood degradation by microorganisms and their enzymes. This paper presents an overview of status of research aimed at application of biotechnology in the pulp and paper industry.