The removal of phenol, ortho- (o-) and para-(p-) cresol was studied with two series of UASB reactors using unacclimatized granular sludges bioaugmented with a consortium enriched against these substances. The parameters studied were the amount of inoculum added to the sludges and the method of immobilization of the inoculum. Two methods were used, adsorption to the biomass or encapsulation within calcium alginate beads. In the bioaugmentation by adsorption experiment, and with a 10% inoculum, complete phenol removal was obtained after 36 d, while 178 d were required in the control reactor. For p-cresol, 95% removal was obtained in the bioaugmented reactor on day 48 while 60 d were required to achieve 90% removal in the control reactor. For o-cresol, the removals were only marginally better with the bioaugmented reactors. Tests performed with the reactors biomass under non-limiting substrate concentrations showed that the specific activities of the bioaugmented biomasses were larger than the original biomass for phenol, and p-cresol even after 276 of operations, showing that the inoculum bacteria successfully colonized the sludge granules. Immobilization of the inoculum by encapsulation in calcium alginate beads, was performed with 10% of the inoculum. Results showed that the best activities were obtained when the consortium was encapsulated alone and the beads added to the sludges. This reactor presented excellent activity and the highest removal of the various phenolic compounds a few days after start-up. After 90 d, a high-phenolic compounds removal was still observed, demonstrating the effectiveness of the encapsulation technique for the start-up and maintenance of high-removal activities. (C) 2000 John Wiley & Sons, Inc.