Degradation of phenol, ortho- and para-cresol was investigated in upflow anaerobic sludge bed (UASB) reactors bioaugmented with a methanogenic enrichment consortium able to degrade a mixture of phenolic compounds, in comparison to a reactor, which was inoculated only with anaerobic granules: 1) natural attachment of free cells to the granules, and 2) encapsulation within alginate beads. The increase of the percentage of enrichment from 2 to 5% improved considerably the startup of the reactors. Going from 5 to 10% had no effect on the removal of the phenolic compounds. Following a period of continuous operation at a hydraulic retention time of 3 days, the bioaugmented reactors showed specific activities on phenol, ortho- and para-cresol, at least twofold higher than those of the control reactor. This increase was attributed to the immobilization of phenol, ortho- and para-cresol-degrading bacteria on the granules.