The effect of phenol on the nitrifying activity of aerobically grown microbial granules, produced in a sequencing batch reactor, was evaluated in batch experiments. Anunonium oxidation rate and nitrate production rate decreased in the presence of phenol. Nitrifying activity was recovered completely after degradation of phenol when initial phenol concentrations were not higher than 10 mg 1(-1). For initial phenol concentrations of 15 and 20 mg 1(-1), the recoveries of nitrate productivity were 77% and 67% of the control, respectively. The results showed that nitrifying bacteria embedded in microbial granules were relatively resilient to the inhibitory effects exerted by phenol. These aerobic microbial granules could potentially be applied to simultaneous removal of organics and ammonia from wastewaters containing phenol. (c) 2005 Elsevier Ltd. All rights reserved.