Phenol and its derivatives are hazardous pollutants that are highly toxic even at low concentrations. The management of wastewater containing high concentrations of phenols represents major economical and environmental challenges to most industries. Biotechnology has been very effective in dealing with major environmental challenges through utilizing different types of bacteria and biocatalysts to develop innovative processes for the biodegradation, biotreatment, and biosorption of various contaminants and wide range of hazardous materials. Biological treatment has proved to be the most promising and most economical approach for the removal of many organic water pollutants such as phenol. Numerous studies have been published in the literature dealing with the biodegradation of phenols utilizing different types of biomasses and different types of reactors. The authors offer a comprehensive review of the present research on the biodegradation of phenols and presents trends for future research and development, with emphasis on an integrated approach that may be adopted to get synergistically enhanced removal rates and to treat the contaminated effluents in an ecologically favorable process.