Baicalin was converted into baicalein by beta-glucuronidase (GUS) encapsulated in liquid-core alginate capsules, mimicking the natural enzyme existence in lysosome. Taking both the physical properties of the capsule and the activity of the encapsulated enzyme into account, optimal conditions (1.0% w/v sodium alginate; 0.10 mol/L CaCl2; 30 min gelation time) for GUS encapsulation were determined. The encapsulated GUS retained up to 88% of its free-form activity with an encapsulation efficiency of 77%. Conversion of baicalin by free and encapsulated GUS resulted in the baicalein productivities of 80% and 65%, respectively. The optimal temperature (60 degrees C) and pH value (pH 7.0) for bioconversion were not changed after encapsulation. In addition, the encapsulated GUS showed no appreciable loss in activity after four repeated cycles, and 90% of its initial activity remained after 26-day storage at 4 degrees C.