3-Hydroxyquinolones (3HQs), similarly to their 3-hydroxychromone analogs, undergo excited state intramolecular proton transfer (ESIPT) resulting in dual emission. In the ground state, 2-phenyl-3HQ derivatives are not flat due to a steric hindrance between the 2-phenyl group and the 3-OH group that participates in the ESIPT reaction. To study the effect of this steric hindrance on the ESIPT reaction, a number of 3HQ derivatives have been synthesized and characterized in different organic solvents by steady-state and time-resolved fluorescence techniques. According to our results, 2-phenyl-3HQ derivatives undergo much faster ESIPT (by nearly 1 order of magnitude) than their 2-methyl-3HQ analogs. Moreover, 1-methyl-2-phenyl-3HQ having a strongly twisted 2-phenyl group undergoes a two- to three-fold slower ESIPT compared to 2-phenyl-3HQ. These results suggest that the flatter conformation of 2-phenyl-3HQ, which allows a close proximity of the 2-phenyl and 3-OH groups, favors a fast ESIPT reaction. The absorption and fluorescence spectra of the 3HQ derivatives additionally confirm that the steric rather than the electronic effect of the 2-phenyl group is responsible for the faster ESIPT reaction. Based on the spectroscopic studies and quantum chemical calculations, we suggest that the 2-phenyl group decreases the rotational freedom of its proximal 3-OH group in the more planar conformation of 2-phenyl-3HQ. As a result, the conformations of 3HQ, where the 3-OH group orients to form an intramolecular H-bond with the 4-carbonyl group, are favored over those with a disrupted intramolecular H-bond. Therefore, the 2-phenyl group sterically favors the intramolecular H-bond and thus accelerates the ESIPT reaction. This conclusion provides a new understanding of the ESIPT process in 3-hydroxyquinolones and related systems and suggests new possibilities for the design of ESIPT based molecular sensors and switchers.