Ammonia liquor with very high concentrations of phenol and alkylated phenols is known to have leaked into the subsurface at a former coal carbonization plant in the UK, giving high concentrations of ammonium in the groundwater. In spite of this, no significant concentrations of phenols were found in the groundwater. The potential for biodegradation of the phenols in the sandstone aquifer at the site has been investigated in laboratory microcosms under aerobic (oxygen amended) and mixed nitrate and iron reducing (nitrate enriched and unamended) anaerobic conditions, at a range of concentrations (low: ∼5 mg l −1, high: ∼60 mg l −1, and very high: ∼600 mg l −1) and in the presence of other organic coal–tar compounds (mono- and polyaromatic hydrocarbons (BTEXs and PAHs) and heterocyclic compounds (NSOs)) and ammonia liquor. Sandstone cores and groundwater for the microcosms were collected from within the anaerobic ammonium plume at the field site. Fast and complete degradation of phenol, o- and p-cresol, 2,5- and 3,4-xylenol with no or very short initial lag-phases was observed under aerobic conditions at low concentrations. 2,6- and 3,5-Xylenol were degraded more slowly and 3,5-xylenol degradation was only just complete after about 1 year. The maximum rates of total phenols degradation in duplicate aerobic microcosms were 1.06 and 1.76 mg l −1 day −1. The degradation of phenols in nitrate enriched and unamended anaerobic microcosms was similar. Fast and complete biodegradation of phenol, cresols, 3,4-xylenol and 3,5-xylenol was observed after short lag-phases in the anaerobic microcosms. 2,5-xylenol was partially degraded after a longer lag-phase and 2,6-xylenol persisted throughout the 3 month long experiments. The maximum rates of total phenols degradation in duplicate nitrate enriched and unamended anaerobic microcosms were 0.30–0.38 and 0.29–0.31 mg l −1 day −1, respectively. The highest phenols concentrations in the anaerobic microcosms apparently required very long adaptation periods or inhibited biodegradation of the phenols. For the intermediate concentration level, degradation occurred after comparable lag-phases and at comparable rates to those observed at low concentration. However, after a while degradation of phenols suddenly decreased drastically and then stopped. Dilution by addition of anaerobic groundwater resulted in continued but slow degradation of phenols in unamended microcosms. The effect of other organic coal–tar compounds (BTEXs, PAHs, NSOs) on the degradation of the phenols under unamended conditions was limited to slightly longer lag-phases for some of the phenols. Other constituents of the ammonia liquor did not appear to significantly affect the degradation of the phenols. Fast and complete degradation of 2,3- and 2,4-xylenol was indicated. These experiments were continued for a longer period of time and revealed complete degradation of 2,5-xylenol and, after an approximately 6-month-long lag-phase partial degradation of 2,6-xylenol. The potential for natural attenuation of phenols from process effluents from coal carbonization under aerobic conditions and mixed nitrate and iron reducing conditions appears promising.