The synthesis of pyrazine-2-carboxylic acid hydrazide, a heterocyclic hydrazide compound, with negligible production of the by-product (pyrazine-2-carboxylic acid) in a solvent-free reaction condition was developed using the acyltransferase activity of amidase of Bacillus smithii strain IITR6b2. This study involves a greener approach with no hazardous chemicals and one-step biotransformation of pyrazinamide to its acid hydrazide (through hydrazinolysis). The Central Composite Design of the Response Surface Methodology was used to find the factors affecting the synthesis of the pyrazine-2-carboxylic acid hydrazide and pyrazine-2-carboxylic acid to find its true optimum. The four factors, namely pyrazinamide, hydrazine dihydrochloride, temperature, and cell concentrations, were considered during optimization. The optimized reaction conditions from the Central Composite Design for achieving the 32.26 mM of pyrazine-2-carboxylic acid hydrazide involve 40 mM of pyrazinamide, 1000 mM of hydrazine dihydrochloride with 2.5 mg/mL cell concentration at 20 °C. It resulted in an optimum production of pyrazine-2-carboxylic acid hydrazide utilizing the acyltransferase activity of amidase of Bacillus smithii IITR6b2, and the results obtained through the Design of Experiments were validated. The fed-batch biotransformation was carried out with alginate-entrapped whole-cell enzyme with the following parameters: agitation at 200 rpm, a pyrazinamide concentration of 40 mM, and 1000 mM of hydrazine dihydrochloride. The final pyrazine-2-carboxylic acid hydrazide concentration of 126 mM was obtained, corresponding to a 63% molar conversion.