We study a magnetic impurity intercalated in bilayer graphene. A representative configuration generates a hybridization function with strong dependence on the conduction-electron energy, including a full gap with one hard and one soft edge. Shifts of the chemical potential via gating or doping drive the system between non-Kondo (free-moment) and Kondo-screened phases, with strong variation of the Kondo scale. Quantum phase transitions near the soft edge are of KosterlitzThouless type, while others are first order. Near the hard edge, a bound-state singlet appears inside the gap; although of single-particle character, its signatures in scanning tunneling spectroscopy are very similar to those arising from a many-body Kondo resonance.PACS numbers: 72.15. Qm, 73.22.Pr, 75.20.Hr, 64.70.Tg One of the remarkable manifestations of cooperative phenomena in condensed matter is the many-body screening of a magnetic impurity in a nonmagnetic metal. This Kondo effect, well understood in ordinary metals [1], acquires added complexity in cases where the host density of states (DOS) varies strongly with energy E near the chemical potential µ. The pseudogap Kondo problem [2-6] with a DOS ρ(E) ∝ |E − µ| r (realized, for example, for r = 1 in high-temperature superconductors [7]) exhibits a rich phase diagram that depends on the band exponent r, the impurity-host exchange coupling J, and the presence or absence of particle-hole (p-h) symmetry.Similar DOS features can also appear in lowdimensional systems such as graphene [8]. The technologically and conceptually important issue of creating localized magnetic moments in monolayer graphene, and the appearance of the Kondo effect, have been the focus of many recent theoretical [9][10][11][12][13][14][15][16][17][18][19][20] and experimental [21][22][23][24] studies, with controversial results (see [25] for an overview). A more complex DOS appears in bilayer graphene (BLG), a material that can be gapped by gating, and thus has attracted much attention for possible device applications [26]. The variety of microscopic environments for magnetic impurities combined with easy tunability, make BLG highly promising for the study of quantum phase transitions (QPTs) into various Kondo states [27,28].This paper explores such QPTs for a representative configuration of an intercalated spin σ = 1/2 magnetic impurity in BLG. This setup is described by an Anderson impurity model with an energy-dependent hybridization featuring a gap that has one hard and one soft edge. Under variation of the chemical potential µ, the system passes from a free-moment (FM) phase to a Kondo phase featuring a strong µ dependence of the Kondo temperature scale. The QPTs found near the soft hybridization edge are of Kosterlitz-Thouless type, while all other QPTs are first order. We present thermodynamic and spectral properties near these QPTs, and discuss some of their consequences for spectroscopy measurements. For µ near the hard hybridization edge, the FM phase exhibits a singlet bound state inside the gap. This bo...