The effluents of chemical and petroleum industries often contain non-biodegradable aromatic compounds, with phenol being one of the major organic pollutants present among a wide variety of highly toxic organic chemicals. Phenol is toxic upon ingestion, contact, or inhalation, and it is lethal to fish even at concentrations as low as 0.005 ppm. Phenol biodegradation has been studied in detail using bacterial strains. However, these microorganisms suffer from substrate inhibition at high concentrations of phenol, whereby growth is inhibited. A phenol-degrading bacterium, P21, was isolated from oil-contaminated soil. The phenotypic characteristics and a phylogenetic analysis indicated the close relationship of strain P21 to Rhodococcus pyridinovorans. Phenol biodegradation by strain P21 was studied under shaking condition. The optimal conditions for phenol biodegradation by strain P21 were 0.09% $KNO_3$, 0.1% $K_2HPO_4$, 0.3% $NaH_2PO_4$, 0.015% $MgSO_4{cdot}7H_2O$, 0.001% $FeSO_4{cdot}7H_2O$, initial pH 9, and $20-30^{circ}C$, respectively. When 1,000 ppm of phenol was added to the optimal medium, the strain P21 completely degraded it within two days. Rhodococcus pyridinovorans P21 could grow in up to 1,500 ppm of phenol as the sole carbon source in a batch culture, but it could not grow in a medium containing above 2,000 ppm. Moreover, strain P21 could utilize toxic compounds, such as toluene, xylene, and hexane, as a sole carbon source. However, no growth was detected on chloroform.