The invention is a process for producing paraxylene, benzene and/or toluene is alkylated with methanol in the presence of a catalyst under conditions effective to convert said benzene and/or toluene to xylene and produce a product stream containing water, xylene and one or more phenolic impurities. The said product stream is separated into a water-rich stream and a xylene-rich stream containing one or more phenolic impurities and at least a portion of the xylene-rich stream is contacted with an aqueous solution of a base under conditions to remove at least some of the phenolic impurities from the xylene-rich stream portion.