Peroxidase was purified by an ion exchange chromatography followed by gel filtration chromatography from dye degrading Bacillus sp. strain VUS. The optimum pH and temperature of the enzyme activity was 3.0 and $65^{circ}C$, respectively. This enzyme showed more activity with n-propanol than other substrates tested iao. xylidine, 3-(3,4-dihydroxy phenyl) L-alanine(L-DOPA), hydroxyquinone, ethanol, indole, and veratrole. Km value of the enzyme was 0.076 mM towards n-propanol under standard assay conditions. Peroxidase was more active in presence of the metal ions like $Li^{2+},;Co^{2+},;K^{2+},;Zn^{2+}$, and $Cu^{2+}$ where as it showed less activity in the presence of $Ca^{2+}$ and $Mn^{2+}$. Inhibitors like ethylenediamine tetraacetic acid (EDTA), glutamine, and phenylalanine inhibited the enzyme partially, while sodium azide ($NaN_3$) completely. The crude as well as the purified peroxidase was able to decolourize different industrial dyes. This enzyme decolourized various textile dyes and enhanced percent decolourization in the presence of redox mediators. Aniline was the most effective redox mediator than other mediators tested. Gas chromatography-Mass spectrometry (GC-MS) confirmed the formation of 7-Acetylamino-4-hydroxy-naphthalene-2-sulphonic acid as the final product of Reactive Orange 16 indicating asymmetric cleavage of the dye.