A novel alkali-tolerant strain JY-2, which could utilize phenol as sole source of carbon and energy, was isolated from activated sludge. It was identified as Pseudomonas sp. by 16S rDNA sequencing analysis. The appropriate conditions for strain growth and phenol biodegradation were as follows: pH 8.0–10.0 and temperature 23–30°C. With initial phenol concentrations of 225, 400, 550 and 750 mg/l, the degradation efficiencies were 94.9, 93.3, 89.3 and 48.2% within 40 h at pH 10.0 and 30°C, respectively. The alkaline phenol-containing wastewater treatment augmented with strain JY-2 in sequencing batch reactor (SBR) system was investigated, which suggested that the bioaugmented (BA) system exhibited the better performance for adjusting high pH to neutral value than the non-bioaugmented (non-BA) one. Also, the BA system showed strong abilities for phenol degradation and maintaining good sedimentation coefficient (SV30). The microbial community dynamics of both sequencing batch reactor (SBR) systems were analyzed by Denaturing Gradient Gel Electrophoresis (DGGE) technique, which showed substantial changes between the two systems. This study suggests that it is feasible to treat alkaline phenol-containing wastewater augmented with strain JY-2.