Hydroxylation of benzene to phenol was catalysed by vanadium substituted heteropolymolybdates of the general formula H3+x [PMo12-xVxO40]. nH(2)O where, x = 1, 2, 3. The optimum catalytic activities (TON = 50-90) were found, when the reaction was performed with equimolar ratio of substrate to oxidant (hydrogen peroxide) at 338 K. Kinetic investigations of the reaction catalysed by mono vanadium substituted heteropolymolybdates, revealed a first-order dependence with respect to the concentrations of the substrate and the catalyst and a half-order dependence with respect to concentration of the oxidant. Temperature dependence on the rate of hydroxylation was also studied and from Arrhenius plot, the activation energy was evaluated to be 21.5 kcal mol(-1). In situ UV-VIS and electron paramagnetic resonance (EPR) spectroscopic studies were carried out to establish the active species. A mechanism involving vanadium (V) peroxo intermediate species has been proposed for the hydroxylation of benzene to phenol.