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Enormous quantities of toxic dyes containing textile effluents are being discharged in natural water systems and thus contaminate the water quality. Hence it is important to develop an eco-friendly and cost effective technology to treat the dyes contaminated wastewater. In this research, laccase enzyme mediated biodegradation of toxic textile dyes such as congo red and gentian violet was investigated using novel, newly isolated laccase producing Pseudomonas stutzeri MN1 and Acinetobacter baumannii MN3. Response surface methodology (RSM) with full factorial central composite design (CCD) was applied to optimize pH (pH 6.0–10.0), starch (1–3%) and yeast extract (0.1–0.3%). The RSM results show that a maximum of 29.41 U/ mL and 41.76 U/ mL laccase activity was achieved by MN1 and MN3, respectively under optimum conditions (pH 8.0, 2% starch and 0.2% yeast extract). The congo red decolorization studies by MN1, MN3 and mixed consortia (MN1 + MN3) showed 84%, 89% and 97% decolourization efficiency, respectively. The gentian violet was decolorized up to 83%, 90% and 95% by MN1, MN3 and mixed consortia (MN1 + MN3), respectively. Phytotoxicity assay showed100% germination of Vigna radiata in presence of decolorized synthetic congo red and gentian violet. Crude extract of laccase decolorized congo red and gentian violet up to 70% and 84% respectively within 24 h. The laccase producing MN1 and MN3 strains can be used to decolorize and detoxify the textile effluents and assist in wastewater treatment.