The lac1 gene encoding an extracellular laccase was isolated from the thermophilic fungus Melanocarpus albomyces. This gene has five introns, and it encodes a protein consisting of 623 amino acids. The deduced amino acid sequence of the laccase was shown to have high homology with laccases from other ascomycetes. In addition to removal of a putative 22-amino-acid signal sequence and a 28-residue propeptide, maturation of the translation product of lac1 was shown to involve cleavage of a C-terminal 14-amino-acid extension. M. albomyces lac1 cDNA was expressed in Saccharomyces cerevisiae under the inducible GAL1 promoter. Extremely low production was obtained with the expression construct containing laccase cDNA with its own signal and propeptide sequences. The activity levels were significantly improved by replacing these sequences with the prepro sequence of the S. cerevisiae α-factor gene. The role of the C-terminal extension in laccase production in S. cerevisiae was also studied. Laccase production was increased sixfold with the modified cDNA that had a stop codon after the native processing site at the C terminus.