This study examined the feasibility of using an algal-bacterial process for removal of phenol and NH4+-N from differently diluted coke wastewater with simultaneous production of biomass. Under illumination, microalgal-bacterial (MSB) cultures performed complete phenol degradation at all dilutions of coke wastewater while sole microalgal culture (MSA) degraded a maximum of 27.3% of phenol (initial concentration: 24.0 mg L−1) from 5-fold diluted wastewater. Furthermore, the MSB culture had the highest rate of NH4+-N removal (8.3 mg L−1 d−1) and fatty acid production (20 mg L−1 d−1) which were 2.3- and 1.5-fold higher than those observed in the MSA cultures, probably due to decreases in toxic organic pollutants. Multivariate analyses indicated that co-cultivation of activated sludge was directly correlated with the elevated removals of phenol and NH4+-N. In the presence of sludge, adequate dilution of the coke wastewater can maximize the effect of bacteria on NH4+-N removal and biomass production.