The objective of this project work is to study the degradation of phenol by bacterial strain isolated from paper sludge. Biodegradation is one of the cheapest methods without any production of hazardous by-products. The growth and phenol biodegradation study was carried out in MSM broth with phenol as the sole carbon source and energy. The strains were designated as S1, S2 and S3 and examined for colony morphology, Gram staining and biochemical tests. Phenol degrading performance of all the strains was evaluated initially. One of the strains namely S2 was found to be highly effective for the removal of phenol. The effect of temperature, pH and phenol concentration on the rate of phenol degradation by that particular strain was carried out. Observations revealed that the rate of phenol biodegradation was significantly affected by pH, temperature of incubation and phenol concentration. The optimal conditions for phenol removal were found to be pH of 8, temperature of 30°C and concentration of phenol of 200 ppm