In this article a luminescence fiber optic biosensor for the microdetection of heavy metal toxicity in waters based on the marine bacterium Aliivibrio fischeri (A. fischeri) encapsulated in alginate microspheres is described. Cu(II), Cd(II), Pb(II), Zn(II), Cr(VI), Co(II), Ni(II), Ag(I) and Fe(II) were selected as sample toxic heavy metal ions for evaluation of the performance of this toxicity microbiosensor. The loss of bioluminescence response from immobilized A. fischeri bacterial cells corresponds to changes in the toxicity levels. The inhibition of the luminescent biosensor response collected at excitation and emission wavelengths of 287 ± 2 nm and 487 ± 2 nm, respectively, was found to be reproducible and repeatable within the relative standard deviation (RSD) range of 2.4-5.7% (n = 8). The toxicity biosensor based on alginate micropsheres exhibited a lower limit of detection (LOD) for Cu(II) (6.40 μg/L), Cd(II) (1.56 μg/L), Pb(II) (47 μg/L), Ag(I) (18 μg/L) than Zn(II) (320 μg/L), Cr(VI) (1,000 μg/L), Co(II) (1700 μg/L), Ni(II) (2800 μg/L), and Fe(III) (3100 μg/L). Such LOD values are lower when compared with other previous reported whole cell toxicity biosensors using agar gel, agarose gel and cellulose membrane biomatrices used for the immobilization of bacterial cells. The A. fischeri bacteria microencapsulated in alginate biopolymer could maintain their metabolic activity for a prolonged period of up to six weeks without any noticeable changes in the bioluminescence response. The bioluminescent biosensor could also be used for the determination of antagonistic toxicity levels for toxicant mixtures. A comparison of the results obtained by atomic absorption spectroscopy (AAS) and using the proposed luminescent A. fischeri-based biosensor suggests that the optical toxicity biosensor can be used for quantitative microdetermination of heavy metal toxicity in environmental water samples.