Provided is a method of producing a low viscosity phenol-modified aromatic hydrocarbon formaldehyde resin (C), including subjecting an aromatic hydrocarbon formaldehyde resin (A) and a phenol (B) to condensation reaction under the presence of an acid catalyst. The method includes: terminating, when a reaction mixture has a viscosity at 25° C. of 200 to 1,500 mPa·S, the condensation reaction by adding an inorganic basic compound and/or a tertiary amine compound having a boiling point of 300° C. or more; and distilling and removing the phenol (B) unreacted and a low boiling component after termination of the condensation reaction, whereby there can be produced a low viscosity phenol-modified aromatic hydrocarbon formaldehyde resin which is kept in a liquid state and contains small amounts of unreacted phenols, and in which increase in viscosity is small even after removal of low boiling components.