Aminoacylase I (E.C.3.5.1.14) was immobilized by entrapment in calcium alginate beads coated with polyethyleneimine for the production of L-phenylalanine by the hydrolysis of a racemic mixture of N-acetyl-DL-phenylalanine. The operational stability in terms of batch operation and continuous reaction in packed-bed bioreactor were studied. Kinetic constants, Km and Vmax values of free and immobilized enzymes were studied. Polyethyleneimine treatment was found to enhance the operational stability of the enzyme though its activity was substantially reduced. When polyethyleneimine-coated calcium alginate beads were packed into packed bed bioreactor, it was stable for at least 25 days under continuous operation without appreciable loss of activity.