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A novel environmental bacterial strain, Escherichia coli moh1 was isolated and characterized from oil industry effluent in Chennai, Tamil Nadu, India. Primary growth experiments showed that this strain has the ability to grow in presence of up to 800 mg/l of phenol in NB medium at 37 C with the initial inoculum of~ 104 CFU. The degradation rate of phenol (200 mg/l) was checked through monitoring growth at 24h using the HPLC system. The results showed considerable decrease in phenol concentration which was obvious from the decrease in peak intensity, a distinct change in the retention time and peak profile indicating complete degradation of phenol. 16SrRNA sequence of the isolate was deposited to GenBank at NCBI and registered as a unique phenol degrading strain.