In the refinery industry, the washing processes of middle-distillates using caustic solutions generate phenol- and sulfide-containing waste streams. The spent caustic liquors generated contain phenols at concentrations higher than 60 g dm(-3) (638.3 mmol dm(-3)). For sulfur compounds, the average sulfide concentration was 48 g dm(-3) (1500 mmol dm(-3)) in these streams. The goal of this study was to evaluate the specific impact of phenol and sulfide concentrations towards the phenol-biodegradation activity of a phenol-acclimated anaerobic granular sludge. An inhibition model was used to calculate the phenol and sulfide inhibitory concentrations that completely stopped the phenol-biodegradation activity (IC100). A maximum phenol-biodegradation activity of 83 mumol g(-1) VSS h(-1) was assessed and the IC100 values were 21.8 mmol dm(-3) and 13.4 mmol dm(-3) for phenol and sulfide respectively. The limitation of the phenol biodegradation flow by phenol inhibition seemed to be related to the more important sensitivity of phenol-degrading bacteria. The up-flow anaerobic sludge bed reactor operating in a non-phenol-dependent inhibition condition did not present any sensitivity to sulfide concentrations below 9.6 mmol dm(-3). At this residual concentration, the pH and bisulfide ions' concentration might be responsible for the general collapsing of the reactor activity. (C) 2004 Society of Chemical Industry.