Abstract • Mutations in Lignin peroxidase Trp171 environment improved azo dyes degradation. • Expression on yeast cell surface and cell lysis allowed reusability of biocatalyst. • Aga2-LiP chimeric variants were characterized. The enzymatic degradation of azo dyes is a promising alternative to ineffective chemical and physical remediation methods. Lignin peroxidase (LiP) from Phanerochaete chrysosporium is a heme-containing lignin-degrading oxidoreductase that catalyzes the peroxide-dependent oxidation of diverse molecules, including industrial dyes. This enzyme is therefore ideal as a starting point for protein engineering. Accordingly, we subjected two positions (165 and 264) in the environment of the catalytic Trp171 residue to saturation mutagenesis, and the resulting library of 104 independent clones was expressed on the surface of yeast cells. This yeast display library was used for the selection of variants with the ability to break down structurally-distinct azo dyes more efficiently. We identified mutants with up to 10-fold greater affinity than wild-type LiP for three diverse azo dyes (Evans blue, amido black 10B and Guinea green) and up to 13-fold higher catalytic activity. Additionally, cell wall fragments displaying mutant LiP enzymes were prepared by toluene-induced cell lysis, achieving significant increases in both enzyme activity and stability compared to a whole-cell biocatalyst. LiP-coated cell wall fragments retained their initial dye degradation activity after 10 reaction cycles each lasting 8 h. The best-performing mutants removed up to 2.5-fold more of each dye than the wild-type LiP in multiple reaction cycles.