The production of cellobiase was investigated using a submerged culture of Aspergillus niger A20. The maximum production occurred when the pH was controlled and maintained at 4.0 during the fermentation process. Lactose (0.2%, w/v) and cellulose (1.5%, w/v) were the most favourable carbon sources. Yeast extract (0.05%, w/v) peptone (0.025%, w/v),urea (0.025%, w/v) and (NH4)(2)SO4 (0.07%, w/v) were the most favourable nitrogen sources. KH2PO4 used at a concentration of 0.2% (w/v) produced the highest enzyme yield. It was possible to increase the cellobiase yield to 27.5 U ml(-1) in the modified medium-The enzymes immobilized on chitosan with 0.3% (v/v) glutaraldehyde and entrapped in 10% polyacrylamide with a 5% (w/v) crosslinking level had the highest activities. Maximal loading of the enzyme activity on chitosan was 1570 U gram carrier(-1). The K-m (Michaelis constant) value of the immobilized enzyme was higher than those of the native enzyme. Thermal stability was improved by the immobilization process.