In this study, the potential of selected psychrotolerant yeast strains for phenol biodegradation was studied. From 39 strains isolated from soil and water samples from Rucianka peat bog, three psychrotolerant yeast strains, A011, B021, and L012, showed the ability to degrade phenol. The result shows that all three yeast strains could degrade phenol at 500 and 750 mg l−1 concentration, whereas strains A011 and L012 could degrade phenol at 1000 mg l−1 concentration. The time needed for degradation of each phenol concentration was no longer than 2 days. Strains A011, B021, and L012 were identified based on 26S rDNA and ITS sequence analysis as belonging to species Candida subhashii, Candida oregonensis, and Schizoblastosporion starkeyi-henricii, respectively.