The effect of physical parameters of cultivation (load volume, temperature, pH, agitation, inoculum size, and incubation period) in the production of laccase by wood-rotting basidiomycete were studied using diluted molasses distillery wastewater (MDW) as a major composition. Using fractional factorial design, our study first identified load volume, agitation, and inoculum size as statistically significant factors. Optimal preferences and mutual interactions of the factors were then determined by the response surface method, which is based on the center composite design. A quadratic model was used to fit the experimental data. The optimized operational parameters for laccase production were determined to be the following: culture temperature of 25°C, pH 4, load volume of 40 mL diluted MDW in 150 mL flask, agitation rate of 183 r·min , inoculation of 11.5% v/v, and cultivation time of 6 d. The experimental validation under these conditions (the maximum laccase production of 2198.2 U·mL was within the confidence interval) subsequently verified the accuracy of the constructed model. Moreover, the removal of chemical oxygen demand and nitrogen of MDW reached 62.85% and 48.00% respectively, and the decolorization ratio under the optimal condition was 41.85%. The enhanced production of laccase by is a new recovery strategy for MDW.