Bacteria displaying heterologous receptors or enzymes on their surface hold great potential as whole-cell adsorbents and biocatalysts, respectively. For industrial applications, such surface-engineered cells need to be killed and chemically fixed to prevent disintegration and leakage of the displayed proteins under process conditions. It is also highly desirable to couple the chemically stabilized cells onto a solid support matrix for additional mechanical stability, flexibility in reactor choice, and easy separation from processed medium. Recently, we described the development of a readily scalable methodology for cell killing, fixation, and outer membrane stabilization via glutaraldehyde fixation followed by secondary crosslinking (Freeman, A., Abramov, S. and Georgiou, G. 1996. Biotechnol. Bioeng. 52: 625-630). Glutaraldehyde treatment was also found, however, to reduce the specific activity of a model enzyme, p-lactamase displayed on the surface of E. coli. Here, we show that crosslinking carried out in the presence of p-lactamase inhibitors, namely phenyl boronic acid or sodium berate, protects the active site from chemical modification resulting in up to threefold higher specific activities without affecting the cell-stabilizing effect of the glutaraldehyde treatment. To prepare an immobilized whole cell biocatalyst, residual unreacted surface aldehyde groups were employed to immobilize covalently the fixed bacteria onto chitosan-coated cellulose powder. The binding of the bacteria onto chitosan-coated cellulose was quantitative up to cell loading of 83 mg dry cell weight/g of support. Cell immobilization did not introduce mass transfer limitations and created only a modest reduction in V-max. Thus, chemical crosslinking, affected in presence of reversible active-site inhibitors and coupled with cell immobilization on chitosan-coated cellulose represents a widely useful methodology for the process application of recombinant bacteria displaying surface-anchored heterologous proteins.