Wood-degrading fungi, including white-rot and soft-rot fungi as well as at least one brown-rot fungus, produce cellobiose dehydrogenase (CDH). CDH has generated recent interest because of its ability to facilitate the formation of free radicals and because it makes a nice model to study intraprotein electron transfer. While the physiological function of CDH is not known, a considerable portion of this review discusses the strength of the data dealing with individual hypotheses. New evidence dealing with proteolysis of CDH in relationship to the interaction of CDH with lignin and manganese peroxidases are discussed. Additionally, recent information dealing with the catalytic mechanism and reactivity of the individual domains of CDH is detailed.