Malachite green was detoxified into p-benzyl-N,N-dimethylaniline and N,N-dimethyl-aniline hydrochloride by Penicillium ochrochloron. Degradation metabolites were analyzed by TLC, HPLC, and FTIR and identified by GCMS analysis. Phytotoxicity testing revealed the non-toxic nature of these metabolites. The percentage decolorization of malachite green (50 mg/L) was 93% in czapek dox broth after 14 h with an optimum pH of 7 at $30^{circ}C$. The induction in the activity of lignin peroxidase after degradation suggested that the degradation of malachite green was peroxidase-mediated. Fungal culture was also found to have detoxified the textile effluent. The values of TDS, TSS, COD, and BOD were reduced in the treated samples compared to the control effluent. The treated effluent was non-toxic to the plants of Triticum aestivum and Ervum lens Linn, and the amount of total chlorophyll was higher in plants with treated effluent when compared to control effluent.