A continuous catalytic process for the acetylation of phenol to phenyl acetate followed by simultaneous Fries rearrangement to get o- and p-hydroxyacetophenones has been described. A silica supported heteropoly acid has been used as the catalyst for the condensation and rearrangement. The experiment has been carried out in the vapour phase, and a complete conversion of phenol to phenyl acetate has been achieved at 140 degreesC. Upon increasing the temperature to 200 degreesC, the phenyl acetate formed isomerised into hydroxyacetophenones with 10% yield and 90% selectivity to the para isomer.