The effects of alginate composition and gelling conditions on the reaction rate of β-galactosidase were  investigated in relation to the diffusional property of the alginate gel beads and deactivation of enzyme during the immobilization process. With increasing mannuronic (M) to guluronic (G) acid ratio of alginate, the effective diffusivity of substrate and the reaction rate of immobilized β-galactosidase decreased. The reaction rate at M/G ratio of 1.05 was about 63% of that at M/G ratio of 0.21. Alginate with smaller M/G ratio was desirable for immobilization because it gave less diffusional obstruction. The effects of gelling temperature and pH on the reaction  rate were also discussed in relation to the diffusional property of alginate gel and enzyme stability. The enzyme stability was found to play major roll in determining the reaction rate. It was recommended that gelling temperature and pH should be selected based mainly on the enzyme  stability.