Phenol biodegradation by suspended and immobilized cells of Rhodococcus erythropolis UPV-1 was studied in discontinuous and continuous mode under optimum culture conditions. Phenol-acclimated cells were adsorbed on diatomaceous earth, where they grew actively forming a biofilm of short filaments. Immobilization protected cells against phenol and resulted in a remarkable enhancement of their respiratory activity and a shorter lag phase preceding active phenol degradation. Under optimum operation conditions in a laboratory-scale air-stirred reactor, the immobilized cells were able to completely degrade phenol in synthetic wastewater at a volumetric productivity of 11.5 kg phenol m(-3) day(-1). Phenol biodegradation was also tested in two different industrial wastewaters (WW1 and WW2) obtained from local resin manufacturing companies, which contained both phenols and formaldehyde. In this case, after wastewater conditioning (i.e., dilution, pH, nitrogen and phosphorous sources and micronutrient amendments) the immobilized cells were able to completely remove the formaldehyde present in both waters. Moreover, they biodegraded phenols completely at a rate of 0.5 kg phenol m(-3) day(-1) in the case of WW1 and partially (but at concentrations lower than 50 mg l(-1)) at 0.1 and 1.0 kg phenol m(-3) day(-1) in the cases of WW2 and WW1, respectively.