Tropical white-rot Lentinus squarrosulus is one of the most potent fungi in biodegradation of lignocellulosic biomass. Transcriptomic analyses of the fungus grown in submerged fermentation revealed that the fungus carries an exhaustive lignocellulose degrading system with laccases, high redox potential peroxidases, glycoside hydrolases and esterases. A novel gene encoding ligninolytic peroxidase with wide substrate specificity was selected for heterologous expression. Based on sequence analysis, this ligninolytic peroxidase was assigned as short-type manganese peroxidase (MnP) lacking the catalytic end tryptophan. cDNA encoding the mature protein was cloned in shuttle vector pPIC9K and successfully expressed in Pichia pastoris GS115. Optimum parameters for rMnP production were devised that yielded an extracellular enzyme concentration of 35 U/ml. Furthermore, application of this enzyme significantly increased the dry matter digestibility of straw by 53 % and 51 % with decrease in acid detergent lignin by 18 % and 17 % of finger millet and paddy straws respectively. Results elucidated the competence of this recombinant enzyme in enhancing the in vitro digestibility of crop residues thus suggesting its application potential in bioconversion of lignocellulosic crop residues into quality ruminant feed.