The textile industries consume a considerable amount of freshwater and discharge untreated or semi-treated pollutants to the environment. Azo dyes, generally employed in textile manufacturing industries, have a hazardous impact on the ecosystem. Incomplete treatment of wastewater containing azo dyes discharges into the aquatic system, which has recalcitrant and toxic properties. Hence, the need for cost-effective and high-performing technologies is essential. In this direction, bacterial degradation is considered an economically viable and efficient technique for the treatment of Active blue (AB) dye. Polyurethane foam (PUF) is a low-cost and hydrophilic material with a microporous structure, which offers an excellent surface-to-volume ratio. Hence, PUF was preferred for the immobilization of isolated bacterial species. For this, a dye-degrading gram-positive bacteria namely Bacillus cereus GS2 IIT (BHU) was isolated from the petroleum sludge. A comparative analysis between free and immobilized cell systems was carried out by varying the process parameters, i.e., batch time, pH, temperature, glucose concentration, and initial AB dye concentration. The corresponding optimum conditions were found to be 6.0 days, 6.5, 30 °C, 1.0 g/L, and 50 mg/L, respectively. The immobilized cell system exceeds the dye removal efficiency (RE) by 10. 7 % compared to the free cell system. The packed bed bioreactor could be able to deliver 98.56 % of dye removal at an inlet loading rate of 30 mg/L d and 50 mg/L of initial dye concentration.