Bi-ZSM-5 and Bi2O3/HZSM-5 with varying amounts of (1, 3, and 5 wt.%) of Bi2O3 were prepared by impregnation and solid state dispersion (SSD) methods. These catalysts were characterized by XRD, UV-Vis DRS, XPS, and BET surface area techniques. Characterization of these catalysts by DRS clearly shows a blue shift of > 100 nm in the absorption band edge of Bi2O3 (band gap shift from 2.75 to 3.5 eV) in the samples prepared by impregnation and a blue shift of 50 nm in the samples prepared by SSD methods indicating that Bi2O3 is in interaction with the support in impregnated samples. XPS studies are also in favor of this observation. The photocatalytic activities of these systems were evaluated in the degradation of phenol under UV irradiation. Catalysts prepared by impregnation method are showing good photocatalytic activity compared to catalysts prepared by SSD method. Based on the characterization and photodegradation activity of the Bi-ZSM-5 catalysts a structure-activity correlation has been established for the effective treatment of phenolic wastes.