This invention relates to a phenolic resin composition comprising a phenolic resin admixed with and/or modified by one or more functionalized organosulfur compounds. This invention also relates to a rubber composition comprising (i) a natural rubber, a synthetic rubber, or a mixture thereof; (ii) one or more phenolic resins; and (iii) one or more functionalized organosulfur compounds. The interaction between the component (i) and the components (ii) and (iii) reduces the hysteresis increase compared to a rubber composition without the component (iii), upon curing the rubber composition. The invention also relates to a process for preparing the phenolic resin composition, a process for preparing the rubber composition, and a process for reducing the hysteresis increase caused in a rubber composition when a phenolic resin is added to a rubber composition.