Treatment of the paper factory effluent was done with free and iminobilized cells of a phenol degrading Alcaligenes sp. d(2). The free cells could bring a maximum of 99% reduction in phenol and 40% reduction in chemical oxygen demand (COD) after 32 and 20 h of treatment, respectively. In the case of immobilized cells, a maximum of 99% phenol reduction and 70% COD reduction was attained after 20 It of treatment under batch process. In the continuous mode of operation using packed bed reactor, the strain was able to give 99% phenol removal and 92% COD reduction in 8 h of residence time The optimum flow rate was 2.5 ml/h and the half life period was 76 h. Even after the complete removal of phenol, the strain could further enhance reduction in chemical oxygen demand, which clearly indicated that in the paper factory effluent, this strain could also oxidize organic matter other than phenol. (c) 2006 Elsevier Ltd. All rights reserved.