The present study was conducted to isolate and identify a phenol-degrading bacterial strain resistant to cadmium obtained from seasonal catchments of the Lut Desert, Iran. Additionally, optimal conditions affecting biological phenol degradation, including pH, temperature, salinity, and carbon-to-nitrogen ratio, were determined using the Taguchi method, and the ability of the purified strain to degrade phenol in different concentrations was investigated. Isolated bacterium strain Bacillus cereus LD-1, capable of phenol degradation and cadmium tolerance, could tolerate and degrade phenol up to a concentration of 1,500 mg/L. All optimized factors except carbon-to-nitrogen ratio had a significant effect on the rate of phenol biodegradation. Among the selected factors, based on the effect size, pH had the highest impact (10.02), followed by salinity (6.16), temperature (5.61), and C:N ratio (2.55) on phenol biodegradation. The optimal conditions for phenol biodegradation were determined as pH of 8, temperature of 30 °C, salinity of 0 g/L, and C:N ratio of 100:30. Under optimal conditions, 80.57% of phenol was decomposed by the LD-1 strain. Considering the high ability of the isolated strain for phenol degradation in the presence of 100 mg/L cadmium, LD-1 can be applied in the biological treatment of phenolic effluents contaminated with heavy metals.