The filamentous fungus Aspergillus ochraceus NCIM-1146 was found to degrade kerosene, when previously grown mycelium (96 h) was incubated in the broth containing kerosene. Higher levels of NADPH-DCIP reductase, aminopyrine N-demethylase and kerosene biodegradation activities were found to be present after the growth in potato dextrose broth for 96 h, when compared with the activities at different time intervals during the growth phase. NADPH was the preferred cofactor for enzyme activity, which was inhibited by CO, indicating cytochrome P450 mediated reactions. A significant increase in all the enzyme activities was observed when mycelium incubated for 18 h in mineral salts medium, containing cholesterol, camphor, naphthalene, 1,2-dimethoxybenzene, phenobarbital, n-hexane, kerosene or saffola oil as inducers. Acetaldehyde produced by alcohol dehydrogenase could be used as an indicator for the kerosene biodegradation.