Sugarcane bagasse is one of the most abundant industrial by-products around the world. In Australia, it is often burnt to generate heat and electricity for sugar mills. Bagasse is typically stored uncovered in large piles for long periods prior to combustion. The microbial communities that grow in bagasse piles during storage can utilise lignocellulosic fibre for energy and growth and survive in this harsh environment that exhibits diverse ranges of pH and temperature. Thus these microbes and their enzymes may have potential for biotechnological exploitation. The use of microbes and their enzymes for the bioconversion of sugarcane bagasse into higher value-added products would offer economic and environmental benefits for the sugar industry. Sugarcane bagasse contains approximately 22-27% lignin which is considered the most difficult component of plant cell wall material to degrade and from which to derive value. Thus, in this study, we targeted microbes that express lignin degrading enzymes. Methods have been developed to screen isolated microbes in plate assays and decolourisation of synthetic dyes that are model compounds for lignin monomers in submerged cultures. Isolates displaying higher enzyme activities were selected and their enzyme production optimised using different media components and inducers. Strains were then assessed for their ability to degrade lignin using different analytical methods. Proteomic approaches were also used to identify new enzymes involved in lignin degradation. Preliminary results have revealed a variety of microorganisms displaying lignin degrading activity.