A bioreactor has been designed and developed for partitioning of aqueous and organic phases with a provision for aeration and stirring, a cooling system and a sampling port. The potential of a cow dung microbial consortium has been assessed for bioremediation of phenol in a single-phase bioreactor and a two-phase partitioning bioreactor. The advantages of the two-phase partitioning bioreactor are discussed. The Pseudomonas putida IFO 14671 has been isolated, cultured and identified from the cow dung microbial consortium as a high-potential phenol degrader. The methods developed in this study present an advance in bioremediation techniques for the biodegradation of organic compounds such as phenol using a bioreactor. We have also demonstrated the potential of microorganisms from cow dung as a source of biomass.