A new cell immobilization method was developed in which cells of Arthrobacter simplex BY-2-3-51 were immobilized by entrapment with a polyvinyl alcohol-alginate complex carrier. The immobilized cells preparation contains spherical beads with high mechanical strength and delta 1-dehydrogenase activity. The activation conditions and enzymatic properties of the immobilized cells were studied. When the initial substrate concentration was 20 mg/mL, the conversion of cortisone acetate to prednisone acetate by immobilized cells in the shaken culture was 98% at 18 hours. The stability of immobilized cells was maintained by activation at proper times.