An aerobic microorganism with an ability to utilize phenol as carbon and energy source was isolated from a hydrocarbon contamination site by employing selective enrichment culture technique. The isolate was identified as Arthrobacter citreus based on morphological, physiological and biochemical tests. This mesophilic organism showed optimal growth at 25 degrees C and at pH of 7.0. The phenol utilization studies with Arthrobacter citreus showed that the complete assimilation occurred in 24 hours. The organism metabolized phenol up to 22 mM concentrations whereas higher levels were inhibitory. Thin layer chromatography, UV spectral and enzyme analysis were suggestive of catechol, as a key intermediate of phenol metabolism. The enzyme activities of phenol hydroxylase and catechol 2,3-dioxygenase in cell free extracts of Arthrobacter citreus were indicative of operation of a meta-cleavage pathway for phenol degradation. The organism had additional ability to degrade catechol, cresols and naphthol. The degradation rates of phenol by alginate and agar immobilized cells in batch fermentations showed continuous phenol metabolism for a period of eight days.