Although titanium silicalite-1 (TS-1) with an MFI framework (interconnected 10-ring micropores) is a useful catalyst for phenol oxidation, Ti-MCM-68, a novel MSE-type titanosilicate with 12-ring and 10-ring micropores, has been developed as a phenol oxidation catalyst with high activity and selectivity toward the p-isomer, hydroquinone. This report describes the improvement in catalytic activity and para-selectivity of Ti-MCM-68 for phenol oxidation. Thermal treatment after Ti insertion significantly enhanced the catalytic activity of Ti-MCM-68, mainly due to an improvement in the hydrophobicity in the micropores. Silylation of the external surface of Ti-MCM-68 with Ph2SiCl2, followed by Ti insertion and calcination, showed greater para-selectivity, indicating that the selective formation of p-isomers occurred within one-dimensional 12-ring micropores in the Ti-MCM-68. The addition of ethanol as a cosolvent to the reaction mixture resulted in the best para-selectivity (>94%) and activity among the modified Ti-MCM-68 catalysts.