Liquefaction of waste paper (WP) was performed in the presence of phenol with an acid catalyst. Newspaper (NP) was liquefied more easily than box paper (BP) or business paper (BNP). Differences in the degree of liquefaction were due to different chemical compositions. That is, NP had a relatively high lignin content, which is known to be easily liquefied, whereas BP and BNP were mainly composed of cellulose with a crystalline structure, which is difficult to liquefy. The acid concentration and phenol/WP ratio were more important factors in the regulation of liquefaction than reaction temperature. The changes in the apparent molecular weight depending on the reaction time were more significant for phenolated NP, with high lignin content, than for phenolated BP. The obtained phenolated products showed thermal flow properties and reactivity as good as those of phenolated wood and commercial Novolak resin. Thermosetting moldings were obtained from phenolated products, and their flexural properties and thermal stability were comparable to those of phenolated wood and commercial Novolak resin. Flexural properties were further improved by the cocondensation reaction between the unreacted phenol of phenolated products and formaldehyde. (C) 2002 John Wiley & Sons, Inc.