Ammonia oxidation by Nitrosomonas europaea, an ammonia oxidizing bacterium prevalent in wastewater treatment, is inhibited in the presence of phenol, due to interaction of the phenol with the ammonia monooxygenase enzyme. Suspended cells of N. europaea were cultured in batch reactors and continuous flow reactors at dilution rates of 0.01–0.2 d−1. The rate of ammonia oxidation in the continuous cultures correlated to the dilution rate in the reactor. The batch and continuous cultures were exposed to 20 μM phenol and ammonia oxidation activity was measured by specific oxygen uptake rates (SOURs). Inhibition of NH3 oxidation by 20 μM phenol ranged from a 77% reduction of SOUR observed with suspended cells harvested during exponential growth, to 26% in biofilms. The extent of inhibition was correlated with ammonia oxidation rates in both suspended and biofilm cells, with greater percent inhibition observed with higher initial rates of NH3 oxidation. In biofilm grown cells, an increase in activity and phenol inhibition were both observed upon dispersing the biofilm cells into fresh, liquid medium. Under higher oxygen tension, an increase in the production of the biofilms was observed and biofilms were more susceptible to phenol inhibition. Dissolved oxygen microsensor measurements showed oxygen limited conditions existed in the biofilms. The ammonia oxidation rate was much lower in biofilms, which were less inhibited during phenol exposure. The results clearly indicate in both suspended and attached cells of N. europaea that a higher extent of phenol inhibition is positively correlated with a higher rate of NH3 oxidation (enzyme turnover).