Quantum mechanical calculations of the dipole moments and binding energies of phenol and phenoxy radical in liquid acetonitrile and water are made using hydrogen-bonded configurations extracted from Monte Carlo simulations. We contend that the preferential solvation of phenol (the lower dipole moment solute) over phenoxy derives from the hydrogen-bond shell. The reconciliation with the usual understanding, that larger dipole solvates better, is obtained if we consider not the dipole moment of the isolated solute but, instead, the average dipole moment in solution of the solute-solvent hydrogen-bonded solvation shell. (C) 2004 Elsevier B.V. All rights reserved.