Water pollution is a major concern for the pulp and paper industry due to the large quantities of effluents generated. Biodegradation of industrial Lignin and AOX by a fungal isolate identified as Aspergillus flavus, white rot fungi which was isolated from Pulp and Paper effluent was studied in batch flask system with industrial effluent and synthetic solution. The flasks were operated at temperature 32°C at 200rpm for eight days in continuous mode. The average overall pH, Temperature, DO, C.O.D, T.D.S, T.S.S, Lignin, AOX were up to 4.56, 32oC, 4.2mg/l, 104mg/l, 6000 mg/l, 4000mg/l, 575.5mg/l, 2195 mg/l respectively after treatment. The Aspergillus flavus sp was the most effective in the biodegradation of Lignin of pulp industry for 94% at 480nm, AOX for 62% at 510nm and of chemical oxygen demand levels for 45% after 8 days of incubation. The optimal conditions found were 4 pH and 32oC temperature for lignin and AOX degradation.