alpha-Chymotrypsin from bovine pancrease (EC 3.4.21.1) was entrapped in Ca-alginate gel particles to carry out hydrolysis of N-acetyl-L-phenylalanine methyl ester (APME) in batch as well as continuous fixed bed reactor. The enzyme was covalently modified with homo-bifunctional polyethylene glycol derivatives in order to reduce its leakage from the beads; 85% modification of the epsilon-NH2 groups of lysine residues caused reduction in the enzyme activity by 50%. However, this modification was helpful in a long run because it reduced both enzyme leakage and deactivation. Effective diffusivities and the distribution coefficients of the substrate and the product were determined experimentally, and later used in simulation of a batch experiment employing the beads. A continuous fixed bed reactor with the gel beads was operated to study the deactivation of the enzyme. During a 15-day period, the enzyme showed about 15% loss in the conversion which occurred only during the first 5 days. After that the enzyme did not deactivate further which demonstrates that this method can be applied for continuous reactions.