The oxidation and hydroxylation of phenols to dihydroxy aromatic compounds have been investigated using phthalocyanines and substituted (chloro- and nitro-) phthalocyanines of copper encapsulated in zeolites (X and Y). H2O2 has been used as oxidant. At ambient conditions, the encapsulated copper chloro- and nitro phthalocyanine complexes, unlike their unsubstituted analogs, are able to oxidise, selectively, phenol to catechol and hydroquinone. The catalytic efficiency (turnover number) of the copper atoms are higher in the encapsulated state compared to that in the "neat" complex. The solid catalysts have been characterised by IR, UV, ESR and ESCA spectroscopy. The influence of various process parameters (like temperature, reaction time, substrate/oxidant ratio, catalyst weight etc.) on the conversion and product distribution is also illustrated and discussed.