Shape-selective formation of 4,4'-diisopropylbiphenyl (4,4'-DIPB) was observed in the isopropylation of biphenyl (BP) over H-mordenite (HM). Shape-selectivity was governed by spatial restriction in transition states in the microporous environment of HM. The selectivity for 4,4'-DIPB was influenced by many factors such as the SiO2/Al2O3 ratio, reaction temperature, and propylene pressure. On the other hand, high selectivities for 4,4'-DIPB were observed in encapsulated products under all of our conditions because of shape-selective catalysis in the HM pores. However, the decrease in the selectivity for 4,4'-DIPB occurred with the decrease in the SiO2/Al2O3 ratio and with change in the reaction conditions, such as increase in temperature and decrease in propylene pressure. The discrepancies in bulk products and in encapsulated products in the HM pores are discussed to understand where and why shape-selective catalysis occurs. The decrease in the selectivity for 4,4'-DIPB over HM with a low SiO2/Al2O3 ratio is due to non-regioselective reactions because of choking of the pore entrance by coke-deposition. The decrease in the selectivity for 4,4'-DIPB under high reaction temperatures, or under low propylene pressures was ascribed to the isomerization of 4,4'-DIPB at external acid sites. These conclusions are also supported by discrepancies of bulk and encapsulated products in the isomerization of 4,4'-DIPB under high the corresponding conditions. No significant isopropylation of 4,4'-DIPB to triisopropylbiphenyls (TrIPB) was observed even under high propylene pressure or at high reaction temperatures. This is presumably due to there not being enough space in the pores for the transition state of further isopropylation of 4,4'-DIPB, and it is one of the reasons for the shape-selective formation of 4,4'-DIPB.