Cordyceps militaris (C. militaris) is a unique medicinal fungus of the genus Cordyceps. It has high economic value due to various biological functions from the extracellular polysaccharides (EPSs) it produces. The aim of this study was to establish a mycelium-immobilization system for EPS production in a bubble column system. First, EPS production was optimized by 90.2% (from 0.72 to 1.37 g/L) using response surface methodology under an alginate-immobilized mycelium system with 6 days of cultivation. The highest EPS production was obtained (5.3 g/L) in a flask system through elongation to 15 days of cultivation. EPS production subsequently further increased to 10.42 g/L utilizing a bubble column reactor. Furthermore, the system can be reused for at least three rounds. In the EPS characteristics analysis, the produced EPSs were mainly composed of glucose and galactose. They presented strong antibacterial activity against Staphylococcus aureus. In terms of antioxidant activity, respective the EPS concentration that caused 50% scavenging of DPPH and ABTS free radicals values (IC50) were 4.65 and 7.92 mg/mL. In summary, these findings should be helpful for establishing a suitable industrial fermentation system for C. militaris and can be studied in the food and medical industries in future work.