Polyphenol oxidases [EC 1.10.3.1 and/or 2], which oxidize various phenolic substances, are widely distributed in animals, plants, and microorganisms. Their systematic classification is obscured by low substrate specificity, and specific inhibitors can serve as probes for investigating physiological functions and diagnostic reagents. Kojic acid is a previously reported polyphenol oxidase inhibitor. In our screening for specific and potent inhibitors of polyphenol oxidases, we isolated Penicillium citrinum YH-31, a microorganism producing a potent and specific inhibitor of laccase [EC 1.10.3.2]. This paper describes the production and identification of this inhibitor. The laccase inhibitor was purified from the culture filtrate and proved to be homogeneous. Based on physicochemical properties, spectral data (FAB-MS, IR, 1H-NMR, 13C-NMR), elemental analysis, and X-ray crystallographic data, the inhibitor was identified as N-hydroxyglycine. N-hydroxyglycine showed potent and specific inhibition against Coriolus versicolor laccase (ID50: 0.10 μmol), with no significant inhibition on tyrosinase, ascorbate oxidase, bilirubin oxidase, plant polyphenol oxidase, or pyrogallol oxidase. Its inhibitory activity against C. versicolor laccase was about 1.3-fold stronger than that of kojic acid (ID50: 0.13 μmol).