Provided is a method of decomposing phenol-based by-product, and more particularly, a method of decomposing phenol-based by-product including: introducing a phenol-based by-product stream, a first stream of a side discharge stream from a decomposition device, and a process water stream to a mixing device and mixing the streams; introducing a discharge stream from the mixing device to a layer separation device to phase-separate the stream into an oil phase and an aqueous phase; passing an oil stream discharged from the layer separation device through any one or more of a first heat exchanger and a second heat exchanger and introducing the stream to the decomposition device to carry out decomposition; and supplying the first stream of the side discharge stream from the decomposition device to the mixing device, forming a mixed stream of a second stream of the side discharge stream with a lower discharge stream and discharging the mixed stream, and recovering effective components from an upper discharge stream.