Biotechnological production of ferulic acid, a precursor of vanillin, is an attractive alternative for various industries due to the high price and demand for natural ferulic acid. Feruloyl esterase has been identified as a key enzyme involved in microbial transformations of ferulic acid to vanillin. Several fungal feruloyl esterases have been purified and characterized for their use in the production of ferulic acid. This paper, for the first time, discusses the use of lactic acid bacteria for the production of ferulic acid. Specifically, we have used Lactobacillus cells and microencapsulation so that ferulic acid can be produced continuously using various types of fermentation systems. Bacteria were encapsulated in alginate-poly-L-lysine-alginate (APA) microcapsules, and the production of ferulic acid by lactobacilli was detected using a real-time high-performance liquid chromatography (HPLC)-based assay. Results show that ferulic acid can be produced using microencapsulated Lactobacillus fermentum (ATCC 11976) with significant levels of biological feruloyl esterase activity.