Vanillyl alcohol oxidase (VAO) from Penicillium simplicissimum catalyzes the enantioselective hydroxylation of 4‐ethylphenol, 4‐propylphenol, and 2‐methoxy‐4‐propylphenol into 1‐(4′‐hydroxyphenyl)ethanol, 1‐(4′‐hydroxyphenyl)propanol, and 1‐(4′‐hydroxy‐3′‐methoxyphenyl)propanol, respectively, with an ee of 94% for the R enantiomer. The stereochemical outcome of the reactions was established by comparing the chiral GC retention times of the products to those of chiral alcohols obtained by the action of the lipases from Candida antarctica and Pseudomonas cepacia. Isotope labeling experiments revealed that the oxygen atom incorporated into the alcoholic products is derived from water. During the VAO‐mediated conversion of 4‐ethylphenol/4‐propylphenol, 4‐vinylphenol/4‐propenylphenol are formed as side products. With 2‐methoxy‐4‐propylphenol as a substrate, this competing side reaction is nearly abolished, resulting in less than 1% of the vinylic product, isoeugenol. The VAO‐mediated conversion of 4‐alkylphenols also results in small amounts of phenolic ketones indicative for a consecutive oxidation step. © 1998 John Wiley & Sons, Inc. Biotechnol Bioeng 59:171–177, 1998.