This paper deals with a study on benzene hydroxylation with hydrogen peroxide, catalyzed by TS-1. The reaction scheme consists of two kinetically parallel primary reactions, leading either to phenol or to benzoquinone. The two diphenol isomers, hydroquinone and catechol, were secondary products, formed on the external sites of TS-1 crystallites (intercrystalline reactivity), and in part in the bulk liquid phase also, because of thermally activated radical reactions. The role of the solvent was examined; because of the presence of methanol/water co-solvents mixture, in three-phase conditions (with two liquid phases) the formation of tar and by-products predominated over the formation of phenol. On the other hand, in two-phase conditions (with a single liquid phase), the selectivity to phenol was higher than 90% at low benzene conversion, but rapidly declined in conditions leading to benzene conversion higher than 3–4%. The kinetically parallel – although chemically consecutive – formation of benzoquinone was minimized by controlling the TS-1 crystallite size; in fact, small-sized TS-1 crystallites produced the highest primary selectivity to phenol. The possible influence of both different titanium environments and defective hydroxyls population was evaluated by means of diffuse reflectance UV–Vis and IR spectroscopy, respectively.