Hydrothermal liquefaction, or HTL, is an attractive technology because it uses hot, pressurized water to transform wet feedstocks such as algae, manure, and sludge into a liquid fuel precursor. The process, however, leaves behind an aqueous phase that is anything but benign. This wastewater carries a complicated cocktail of dissolved organic compounds, including phenolics, nitrogen heterocycles, carboxylic acids, and sugars, along with abundant nutrients such as nitrogen and phosphorus. That combination makes HTL aqueous phase simultaneously a nuisance and a prize. The nutrients are valuable enough to justify recovery, yet the chemical heterogeneity and toxicity of the stream make detoxification and nutrient reclamation expensive and technically difficult. The researchers note that these challenges have been a persistent barrier to making HTL commercially viable at scale.

Fungi have long intrigued environmental engineers because of their extraordinary metabolic breadth. White-rot basidiomycetes such as Trametes versicolor are famous for decomposing lignin, one of the most recalcitrant plant polymers on Earth, using an arsenal of oxidative enzymes. That same enzymatic versatility makes them promising candidates for degrading or transforming the recalcitrant compounds found in industrial waste streams. But promise is not the same as practice. To harness fungal bioremediation reliably, scientists need to understand which genes actually underpin tolerance to toxic wastewater. Without that genetic map, efforts to breed or engineer more resilient strains have been largely a matter of trial and error.

To build that map, the Illinois team, led by Rachel E. J. Dalke and corresponding author Laurie B. Leonelli, challenged cultures of Trametes versicolor with three distinct HTL aqueous phase samples, each with its own chemical fingerprint. They then performed transcriptomic analysis, sequencing the messenger RNA present in the fungal cells to quantify how thousands of genes changed their expression in response to each wastewater. The design was deliberate: by testing the fungus against multiple, chemically different aqueous phases, the researchers could distinguish genes that respond to one specific compound from genes that form a universal stress program, activated no matter what particular toxins are in the water.

The results revealed a striking pattern of convergent response. Across all three conditions, the fungus upregulated genes encoding NAD(P)-binding proteins, alpha/beta-hydrolases, aldo/keto reductases, and cytochrome P450s. Each of these protein families plays a coherent role in a chemical defense strategy. NAD(P)-binding proteins participate in redox reactions that help cells manage oxidative stress and regenerate reducing power. Aldo/keto reductases chemically reduce reactive aldehydes and ketones, compounds that are notorious for damaging proteins and DNA. Alpha/beta-hydrolases hydrolyze a wide range of esters and related bonds, effectively disassembling foreign molecules. And cytochrome P450s, the celebrated detoxification enzymes found across all kingdoms of life, catalyze oxidative transformations that make hydrophobic toxins more soluble and easier to modify or excrete.

In other words, the fungus does not simply endure the wastewater; it mobilizes an integrated biochemical toolkit that detects, transforms, and neutralizes the offensive chemistry. The transcriptomic data were paired with measurements showing concomitant changes in the biochemical composition of the aqueous phases themselves, evidence that the fungal activity was actually altering the wastewater rather than merely surviving in it. This pairing of gene expression with chemical change is what elevates the study from a catalog of stress genes to a demonstration of active biotransformation. The authors emphasize that these upregulated gene families represent prime candidates for future functional validation, the experimental work needed to confirm exactly what each gene contributes to tolerance and degradation.

The concept of a universal stress response is the study’s most consequential finding. Because the same gene families were induced regardless of which aqueous phase the fungus encountered, Trametes versicolor appears to possess a general-purpose program for coping with chemically heterogeneous toxic streams. For engineers, that is encouraging news. It suggests that a strain optimized for tolerance might perform robustly across the variable feedstocks and operating conditions that any real HTL facility would face, rather than requiring bespoke solutions for every batch of wastewater. It also provides a blueprint for engineering: if researchers can enhance the expression or activity of these core gene families, they may be able to create fungal strains that detoxify and reclaim nutrients from diverse and hostile wastewaters far more efficiently than wild-type organisms.

The implications extend beyond biofuel refineries. Industrial wastewater around the world contains persistent pollutants that are difficult to treat and pose significant risks to ecosystems, and conventional treatment plants struggle with exactly the kind of chemically complex, low-concentration contaminant mixtures that white-rot fungi evolved to dismantle. A validated fungal platform for HTL aqueous phase could therefore serve as a template for treating phenolic wastes, antibiotic residues, and other recalcitrant streams. At the same time, recovering nitrogen and phosphorus from wastewater aligns with growing interest in circular nutrient economies, where wastes from energy production become feedstocks for fertilizer or further bioprocesses rather than disposal liabilities.

The path from gene candidates to engineered strains remains a long one, and the authors are appropriately measured about it. Transcriptomics reveals which genes are switched on; it does not prove what each protein does in vivo, and functional validation through gene knockouts, heterologous expression, and enzymatic assays will be the crucial next step. The study was supported by the U.S. Department of Agriculture’s National Institute of Food and Agriculture through a Hatch Act award, reflecting its relevance to agricultural and biological engineering. But the conceptual advance is clear and timely. As the world seeks to scale up renewable fuels, the waste streams they generate cannot be ignored. What this research shows is that the solution to a very modern industrial problem may be written into the genome of a fungus growing quietly on a fallen log, waiting for the right combination of chemistry to switch on its ancient, adaptable defense machinery.

Subject of Research: Transcriptional stress response gene candidates in Trametes versicolor exposed to hydrothermal liquefaction aqueous phase wastewater

Article Title: Transcriptional reprogramming in Trametes versicolor reveals gene candidates involved in universal stress response to hydrothermal liquefaction aqueous phase

Article References: Dalke, R. E. J., Reynolds, L., Jing, Q., Davidson, P. C., Zhang, Y., & Leonelli, L. B. (2026). Transcriptional reprogramming in Trametes versicolor reveals gene candidates involved in universal stress response to hydrothermal liquefaction aqueous phase. Biotechnology for Biofuels and Bioproducts. https://doi.org/10.1186/s13068-026-02813-y

Image Credits: AI Generated

DOI: 10.1186/s13068-026-02813-y

Keywords: bioremediation, fungi, Trametes versicolor, hydrothermal liquefaction, wastewater treatment, transcriptomics, stress response, nutrient reclamation, cytochrome P450, white-rot fungus, biocrude, gene expression