White rot fungi such as Pleurotus ostreatus have received much attention in recent years for their valuable enzymatic systems that effectively deconstruct lignin and variety of toxic organic pollutants resemble the substructure of lignin. Versatile peroxidases (VPs) are members of the ligninolytic heme peroxidase gene family. The VPs contain unique active sites which are responsible of direct oxidation of various aromatic compounds in addition to the well-known Mn2+ binding active site. In Mn2+ -amended glucose-peptone (GP) medium the expression level of the vp1 gene was extremely repressed. This seems to be a "biological contradiction", as Mn2+ is considered to be the best substrate of VPs. The aim of this study was to explore the oxidation mechanisms of aromatic compounds by VP1 and its function under Mn2+-deficiency. We show that in Mn2+-deficient GP medium VP1 (encoded by vp1) has a key and non-redundant function. To better understand the degradation mechanisms, we purified and characterized VP1. We found that the three active sites of VP1 are stable in a wide range of pH and temperature levels. While the pH optimum for Mn2+ oxidation is 5, the optimum pH of direct oxidation (for both OII and RB5) was found to be 3-3.5. Indeed, effective -independent in vivo decoloriszation occurred only under acidic conditions. In addition, competitive inhibition was found to occur between Mn2+ and OII / RB5 oxidations, thus shedding light on the aforementioned "biological contradiction". The purified enzyme degraded 60% of OII (50µM) within the first min and up to 90% within six minutes. OII degradation metabolites identified by LC-MS indicating that the mechanisms of degradation are affected by the presence of Mn2+ and pH level.