Immobilized growing cells of Candida tropicalis were prepared by entrapment into polyacrylamide (PAA) gel beads. Continuous degradation was conducted with inlet phenol concentration ranging from 1000 up to 5000 mg l(-1). It was found that inlet concentrations of 4000 and 5000 mg l(-1) took less than 5 and 10 days, respectively, to achieve a phenol removal efficiency of over 95%. The maximum biodegradation rate of 7.68 g l(-1) per day was reached at the inlet concentration of 5000 mg l(-1). The formation of PAA gel beads was accomplished in aqueous phase associated with the gelling reaction of Ca-alginate. Effects of monomer concentration and crosslinkerlinker content on the diffusivity of phenol in gel beads were studied. The oxygen diffusivity in gel beads was estimated according to a well-known theoretical model using experimental data. It was found that the ratio of oxygen diffusivity in gel beads to that in water was around 30%. The immobilized-cell beads were used to degrade phenol in an air-lift bioreactor undergoing continuous operation at a constant hydraulic retention time of 15 h (dilution rate 0.067 h(-1)).