Water-promoted ortho-selective monohydroxymethylation of phenols in the NaBO2 system generates salicyl alcohols in 65-97% yields. A remarkable rate-enhancement by water was observed, and NaBO2 appeared to serve the dual role of a suitable base and an efficient chelating reagent. This protocol possesses many advantages such as short reaction times, expanded substrate scope, and high mono- and regio-selectivities. The experimental results were explained by the calculations based on local ionisation energy minima, leading to a possible reaction mechanism.