A field experiment was conducted to study the possibility of in situ decomposition of trash by a lignolytic fungus, Phanerochaete chrysosporium and its effect on growth and yield of ratoon sugarcane at different levels of NPK fertilizers i.e. 50, 75 and 100 percent recommended doses (250:75:190 kg NPK ha) of fertilizer (RDF). The results indicated that the organic carbon and total nitrogen in soil at crop harvest were found to be highest in plots with trash + P. chrysosporium. The dry matter production was highest in plots with trash + P. chrysosporium at all the stages of crop growth except at 180 days after planting during which plant dry matter production did not differ significantly between 75 and 100 per cent RDF. The increases in cane yield and N-uptake at harvest were significant with increase in fertilizer levels. All these parameters were highest at 100 per cent RDF. The cane height increased significantly upto 75 per cent RDF and further increase in case height beyond 75per cent RDF was non significant. The cane height, cane yield and N uptake at harvest were maximum in plots with trash + P. chrysosporium. The brix, pol and purity were found to be highest at 100 per cent RDF and the trash application had no significant influence on brix, pol and purity in any of the treatment combinations.