The production of ligninolytic enzymes by the fungus Schizophyllum sp. F17 using a cost-effective medium comprised of agro-industrial residues in solid-state fermentation (SSF) was optimized. The maximum activities of the enzymes manganese peroxidase (MnP), laccase (Lac), and lignin peroxidases (LiP) were 1,200, 586, and 109 U/L, respectively, on day 5 of SSF. In vitro decolorization of three structurally different azo dyes by the extracellular enzymes was monitored to determine its decolorization capability. The results indicated that crude MnP, but not LiP and Lac, played a crucial role in the decolorization of azo dyes. After optimization of the dye decolorization system with crude MnP, the decolorization rates of Orange IV and Orange G, at an initial dye concentration of 50 mg/L, were enhanced to 76 and 57%, respectively, after 20 min of reaction at pH 4 and $35^{circ}C$. However, only 8% decolorization of Congo red was observed. This enzymatic reaction system revealed a rapid decolorization of azo dyes with a low MnP activity of 24 U/L. Thus, this study could be the basis for the production and application of MnP on a larger scale using a low-cost substrate.