PURPOSE: To prepare the titled compound useful as a raw material of various pharmaceuticals, and industrial chemicals, in higher yield than the one attained by the reaction in an alcohol, by reducing a substituted phenol with hydrogen in water in the presence of a palladium catalyst.

CONSTITUTION: A susbtituted phenol of formula I (R is OH, lower alkyl, or lower alkoxy), e.g. hydroquinone, resorcinol, catechol, methoxyphenol, methyphenol, etc., is reduced with hydrogen in wayer in the presence of a palladium catalyst at 90W 130°C under a hydrogen pressure of 2W15kg/cm2 (gauge) to obtain the objective compound of formula II, e.g. 4-hydroxycyclohexane, 4-methylcyclohexane, etc. The palladium catalyst is pref. the one obtained by supporting 0.5W8wt% of metallic palladium to a carrier such as activated carbon, silica gel, etc. The amount of water is pref. 0.5W20l per 1mol of the substituted phenol.