Coupling a heterogeneous catalytic reaction with a membrane separation can solve the problem concerning catalyst separation in situ from the reaction mixture and make the production process continuous. In this article, the feasibility of continuous hydroxylation of phenol to hydroquinone (HQ) and catechol (CA) over ultrafine TS‐1 catalyst in a submerged ceramic membrane reactor system is investigated. It has demonstrated that the submerged ceramic membrane reactor system can maintain a steady production of HQ and CA, and has a higher productivity than the batch reactor and the fixed‐bed. The effects of operation conditions on the properties of the coupling process are examined by single factor experiments. Results show that the operation conditions influence greatly the conversion, selectivity of phenol hydroxylation, and the filtration resistance. The phenol conversion is above 17% and the dihydroxybenzene (DHB) selectivity keeps at about 90% in a 20 h continuous run under the optimal reaction condition. © 2008 American Institute of Chemical Engineers AIChE J, 2008