Coal gasification effluent is a typical refractory industrial wastewater with a very poor anaerobic biodegradability due to its toxicity. Methanol was introduced to improve anaerobic biodegradability of real coal gasification wastewater, and the effect of methanol addition on the performance was investigated in a mesophilic upflow anaerobic sludge bed reactor with a hydraulic retention time of 24 hr. Experimental results indicated that anaerobic treatment of coal gasification wastewater was feasible with the addition of methanol. The corresponding maximum COD and phenol removal rates were 71% and 75%, respectively, with methanol concentration of 500 mgCOD/L for a total organic loading rate of 3.5 kg COD/(m3·day) and a phenol loading rate of 0.6 kg/(m3·day). The phenol removal rate was not improved with a higher methanol concentration of 1000 mg COD/L. Substrate utilization rate (SUR) tests indicated that the SURs of phenol were 106, 132, and 83 mg phenol/(g VSS.day) at methanol concentrations of 250, 500, and 1000 mg COD/L, respectively, and only 45 mg phenol/(g VSS.day) in the control reactor. The presence of methanol could reduce the toxicity of coal gasification wastewater and increase the biodegradation of phenolic compounds.