The microbial extracellular polysaccharide gellan gum has been explored for its application in whole cell immobilization. Preliminary evaluation of the physicochemical properties of gellan gum in the presence of monovalent cation tetramethyl ammonium chloride (TMACl) was carried out. Gellan gum immobilized cells demonstrated better rheological properties than gellan gum. Attempts have been made to reveal the evaluation of gellan gum as a matrix to immobilize a thermotolerant yeast Kluyveromyces marxianus NCYC 2675. A 3(2) factorial design was used to study the simultaneous effect of two variables. The effect of the polymer concentration and TMACl concentration on various dependent variables like gelling temperature, mean particle size and enzyme activity of the yeast cells was studied. A statistical model with a significant interaction term was obtained to predict the results. Further, optimized immobilized system was evaluated with significant storage stability at 10 C and enhanced reusability with maximum conversion of > 90 % when crosslinked with glutaraldehyde.