Here, we report on the abundant formation of phenol and molecular hydrogen when benzene vapor was exposed to gas plasma generated by +5.5 kV corona discharge of water vapor in argon in the absence of oxygen. Systematic analysis using a series of isotopic standards (d6-benzene, D2O, and H218O) and benzene derivatives (mono-, di-, trichlorobenzene, and N,N-dimethylaniline) indicated that the formation of phenol occurred through the reaction between neutral benzene and the radical cation of water dimer, (H2O)2+•. A two-step reaction mechanism was proposed based on the results of experiments and DFT calculations: (1) the formation of (C6H6...H2O)+• intermediate through electrophilic addition; (2) the formation of C6H5OH+• through the release of H2 from the (C6H6...H2O)+• intermediate. Our findings offer a novel catalyst-free method to prepare phenol from benzene with phenol selectivity >90%.