A new biotechnological procedure using laccase in combination with a hydrophobic phenolic compound (lauryl gallate) for the hydrophobization of cellulose fibres and internal sizing of paper was developed. Cellulose fibres from hardwood kraft pulp were incubated with laccase (Lac), in combination with lauryl gallate (LG). The Lac-LG treatment resulted in the internal sizing of paper, and also in significantly reduced water penetration in the handsheets and wettability of the paper surface. Paper was found not to be effectively rendered hydrophobic by LG alone. SEM images of the fibre network revealed the presence of the sizing agent: a product of the reaction between laccase and lauryl gallate. Binding of lauryl gallate to cellulose fibres was suggested by the increase in kappa number of the pulp and further confirmed by IR spectroscopy