Phenol and its derivatives are common water pollutants and include wide variety of organic chemicals. Phenol poisoning can occur by skin absorption, inhalation, ingestion and various other methods which can result in health effects. High exposures to phenol may be fatal to human beings. Accumulation of phenol creates toxicity both for flora and fauna. Therefore, removal of phenol is crucial to perpetuate the environment and individual. Among various treatment methods available for removal of phenols, biodegradation is environmental friendly. Biological methods are gaining importance as they convert the wastes into harmless end products. The present work focuses on assessment of biological removal (biodegradation) of phenol. Various factors influence the efficiency of biodegradation of phenol such as ability of the microorganism, enzymes involved, the mechanism of degradation and influencing factors. This study describes about the sources of phenol, adverse effects on the environment, microorganisms involved in the biodegradation (aerobic and anaerobic) and enzymes that polymerize phenol.