This study assessed the performance of a three-chamber microbial desalination cell (MDC) for simultaneous electricity generation, phenol biodegradation, and salt removal from water. The MDC operated with anaerobic sludge in the anode chamber at varying phenol concentrations in the range of 100–1000 mg L−1 and bio-cathode with sodium acetate as the catholyte. The highest power density (7.5 W m−3), desalination efficiency (66.9 %), and current efficiency (75.5 %) were obtained at optimal phenol concentration of 700 mg L−1. Non-electroactive bacteria dominated the anode microbial community through high-throughput sequencing analysis. The population of electroactive bacteria decreased, including Geobacter and Rhodopseudomonas from 9.8 % and 7.8 % to 0.9 % and 0.6 %, respectively, due to phenol toxicity, Cl− migration, and pH fluctuations. Meanwhile, other genera, such as Chryseobacterium (from 0.8 % to 4.5 %) and Clostridium (from 1.4 % to 2.2 %), were observed to thrive in the saline and acidic phenolic environment of the anode chamber.