The degradation of phenol (2-30 mM) by free cells and by alginate-immobilized cells of Aureobasidium pullulans FE13 isolated from stainless steel effluents was studied in batch cultures with saline solution not supplemented with nutrients or yeast extract. The rate at which the immobilized cells degrade phenol was similar to the rate at which the suspended cells could degrade phenol, for a concentration of up to 16 mM of phenol. The maximum phenol volumetric degradation rate for 16 mM phenol was found to be 18.35 mg l(-1) h(-1) in the assays with free cells and 20.45 mg l(-1) h(-1) in the assays with alginate-immobilized cells, 18 mM phenol and cellular concentration of 0.176 g/l. At concentrations higher than this, an inhibitory effect was observed, resulting in the lowering of the phenol degradation rates. The immobilization was detrimental to the catechol 1,2-dioxygenase activity. However, the immobilized cells remained viable for a longer period, increasing the efficiency of phenol degradation. The yeast showed catechol 1,2-dioxygenase activity only after growth in the phenol, which was induced at phenol concentrations as low as 0.05 mM and up to 25 mM at 45 h of incubation at 30 degrees C. Phenol concentrations higher than 6 mM were inhibitory to the enzyme. Addition of glucose, lactate, succinate, and benzoate reduced the rate at which phenol is consumed by cells. Our results suggest that inoculants based on immobilized cells of A. pullulans FE13 has potential application in the biodegradation of phenol and possibly in the degradation of other related aromatic compounds. (c) 2008 Elsevier B.V. All rights reserved.