We report the colorimetric detection and photocatalytic degradation of toxic phenolic compounds using Au@Ni loaded reduced graphene oxide (rGO) nanostructures. Core-shell nanoparticles of Au and Ni are successfully designed on rGO with size < 8 nm by a solvothermal route which demonstrate excellent enzyme mimic behaviour towards the oxidation of 3,3',5,5' tetramethylbenzidine (TMB), a peroxidase substrate and towards colorimetric detection of phenols with detection limit as low as 1.68 mu M, wide detection range of 1-300 mu M and admirable selectivity. Additionally, the Au@Ni/rGO nanocomposite exhibits excellent photo responsive behaviour towards degradation of phenol, 2-chlorophenol (2-CP) and 2-nitrophenol (2-NP) under natural sunlight irradiation with more than 87% degradation. The superiority of the bimetallic nanocomposite is established by comparing its activity to its monometallic counterparts. The sustainability of the nanocomposite is assessed through the reusability in the photocatalytic reaction upto six consecutive cycles without significant loss in activity. This is the first study where nanomaterials are used for both detection and degradation of environmental pollutants with positive and encouraging results.