A UV/H2O2 process and an activated sludge bioreactor were integrated to achieve a cost-effective process of aqueous degradation of phenol. By applying the two-step Haldane approach for the activated sludge bioreactor and a validated kinetic model for the UV/H2O2 process, an integrated model was developed for the phenol degradation in a combined photochemical-biological system. In this study, a kinetic model was employed to study the effects of different parameters in the combined photochemical-biological system, where the optimum conditions in terms of retention time and cost were determined. Three penalized objective functions were developed to find the best operating conditions including the minimization of the retention time, the power consumption, and the total cost. The least retention time for this system was determined to be 99 h and the optimal electrical energy consumption occurred at a photochemical retention time of 15 h with the biological retention time of 92 h. Total cost for different retention times was calculated demonstrating the fact that the incurred cost by the photochemical unit was considerably higher than that of the biological unit; however, the minimum total cost was evaluated to occur at 15.5 h of photochemical retention time and 90 h of biological retention time. (C) 2008 The Institution of Chemical Engineers. Published by Elsevier B.V. All rights reserved.