Amidase hydrolases/acyltransferases are of considerable industrial interest due to potential applications in the production of useful hydroxamic acids. The test strain, capable of acetamide degradation, was isolated by an enrichment technique with acetamide as sole source of nitrogen. Based on morphology, physiological tests and biochemical tests, this isolate was identified as Bacillus sp. and on the basis of 16S Ribosomal ribonucleic acid sequence, a phylogenetic tree was drawn and was identified as Bacillus megaterium. Resting cells containing active acyltransferase enzyme were prepared and immobilized in the gel beads of sodium alginate, agar, polyacrylamide and polyvinyl alcohol–alginate. The beads were tested for acyltransferase using Iron (III) chloride reagents at 55°C and were found to be affected by substrate concentration, type of buffer, buffer pH and reaction temperature. These factors were optimized using sodium alginate immobilized beads. This study proved useful in understanding the technique of immobilization of acyltransferase enzyme, its operational stability and its importance in the synthesis of hydroxamic acid.