Inhibition and restoration of different concentrations of phenol on the bioactivity of anaerobic granular sludge were investigated with laboratory-scale equipment. It indicated that phenol concentration lower than 50 mg/l show no inhibitory effect on bioactivities of granular sludge. However, methane productivity, extracellular polymeric substances (EPS) content, and coenzyme F-420 activity were decreased by varying degrees when phenol concentration adopted for inhibition ranged between 50 and 400 mg/l. Noticeably, methane productivity could be fully or partly restored in case the phenol was removed after 24 h of phenol inhibition.