A novel bifunctional catalase with additional phenol oxidase activity (CATPO) is produced by the thermophilic fungus, Scytalidium thermophilum, in a growth-associated manner. In order to study the biological significance of this dual enzyme in relation to phenolic compounds, 14 phenolics were tested for their effect on growth and CATPO production. It was determined that some phenolics exerted a negative effect on growth (catechol, coumaric acid, hydroquinone, kaempferol, myricetin), while others either did not influence growth in a negative manner or enhanced growth by a maximum of 50% increase in biomass (caffeic acid, chlorogenic acid, catechin, gallic acid, resorcinol, vanillic acid). Hydroquinone and myricetin showed an antifungal effect and enhanced CATPO production, while catechol, coumaric acid, and kaempferol decreased CATPO production and showed a toxic effect at higher doses. In general, phenolics acting in an antioxidant manner exhibited a reverse interrelation with CATPO production. These results suggest that the presence of antioxidant phenolic compounds has an effect on enhancing its antioxidant activity; enzyme is therefore no longer required.