The present work investigated the degradation of two Indian hardwoods (Pithecellobium dulce and Tamarindus indica) and the activities of lignocellulolytic enzymes by Pseudolagarobasidium acaciicola AGST3 and Tricholoma giganteum AGDR1. Laccase exhibited the highest ligninolytic activity, followed by manganese peroxidase and lignin peroxidase in both white rot fungi. Accessory enzymes such as aryl alcohol oxidase and cellobiose dehydrogenase showed higher activities till 21 days after incubation and then declined till 30 days. Xylanase and β-glucosidase were also found to be stable in both fungi during the degradation of hardwoods. The cultures, P. acaciicola AGST3 and T. giganteum AGDR1 accumulated high amounts of oxalic acid and produced weddellite (0.2–9 μm) and whewellite (5–21 μm) crystals, respectively. Comparative decay studies revealed that both the fungi were able to degrade lignin, cellulose and hemicelluloses of two hardwoods efficiently. During the pyrolysis reaction, decrease in onset temperature and activation energy was observed with the fungal treated wood as compared to the untreated wood. The basidiomycete cultures used in the study are efficient lignin degraders and can be applied as a pretreatment for second generation biofuels.