Microalgae immobilization was widely studied to address the challenge of algal cells harvesting, however, its stability and efficiency in treating real food industrial wastewater has not been well studied. In this study, microalgae were co-immobilized with sludge bacteria in alginate beads for treatment of real meat processing wastewater and an annular photobioreactor was designed to facilitate efficient light transmission at high beads-to-wastewater ratios. Results showed that increasing alginate mixture from 1.25% to 2.00% (w/v) extended beads stability in real wastewater from three to seven days. When beads were suspended in wastewater the overshading effect at beads-to-wastewater ratio of 20% (v/v) was significant and average algal growth (0.17 mg/bead) was lower than 2% (0.46 mg/bead) and 5% (0.36 mg/bead). Nevertheless, the ratio of 20% (v/v) was preferred as the higher beads count may compensate the disadvantage, however, the light transmission efficiency needed to be improved. The effect of environmental temperature indicated that at 37 °C beads started rupturing after three-days treatment due to the excessive growth of immobilized microorganisms. In comparison with suspended photobioreactor, in improved annular photobioreactor algal growth increased from 1412.6 to 3191.0 mg/L and removal of chemical oxygen demand (COD) and total nitrogen (TN) were improved from 78.5 to 82.9% and from 68.5 to 84.4% respectively with 89.4% total phosphate (PO43−) being removed. By the end of treatment, 135.9 mg/L TN and 99.2 mg/L total PO43− were removed and it was speculated that most of nitrogen and phosphorus were removed by algal assimilation rather than the physical adsorption of alginate gel. Findings of this study provided directions for the application of immobilized microalgae in the real world.