Fenton reaction is a highly effective treatment for degrading phenolic compounds in an aqueous solution. However, during phenol oxidation, the oxidized water takes on a dark brown color associated with increased toxicity. Then, although phenol can be completely removed, if the oxidation process is not carried out properly, the final wastewater will be brown in color and have higher toxicity, two parameters in which legislation imposes restrictions. This paper analyzes the development of the dark color observed in the solution under oxidation treatment and formulates a reaction mechanism to explain the color generation. The experiments were carried out following the batch-wise procedure, but with the solution pH being kept constant throughout the reaction at its optimum value for phenol removal, i.e., pH 3.0. It is checked experimentally that color is formed at the beginning of the reaction in less than five minutes, and follows the kinetic-path of a reaction intermediate. During the first steps of the reaction phenol is degraded to dihydroxylated rings (catechol, resorcinol, and hydroquinone). These aromatic intermediates generate higher colored compounds such as ortho- and parabenzoquinone. On the other hand the dihydroxylated rings can react with their own quinones to generate charge-transfer complexes (quinhydrone), compounds which take on a dark color at low concentrations. Moreover, when iron reacts with hydrogen peroxide, ferric ions are generated that can be coordinated to benzene rings to produce colored metal complexes. The observed color of the solution is not a fortuitous result depending on trace components of low significance, but depends directly on the main reaction intermediates, so it is concluded that observed color depends on the level of oxidation reached. The maximum color observable during oxidation treatment (A(o)) depends only on initial phenol concentration and not on oxidant or catalyst doses.