Low aqueous phase solubility is the major limiting factor in successful biodegradation of pyrene and other polycyclic aromatic hydrocarbons (PAH), which can, however, be overcome by using a suitable surfactant. Biodegradation of pyrene by immobilized cells of Mycobacterium frederiksbergense in presence of non-ionic surfactant Tween 80 was evaluated. For cell immobilization, beads were prepared using calcium alginate as the immobilizing material based on immobilized cell viability and mechanical stability of the beads. Complete degradation of pyrene was achieved employing the immobilized cells in batch shake flask experiments for all four different initial concentrations of the PAH at 100 mg l−1, 200 mg l−1, 400 mg l−1 and 1000 mg l−1. The experimental results of biodegradation of pyrene at very high initial concentration of 1000 mg l−1 using the cell immobilized beads was further investigated in a 3 l fermentor operated at controlled conditions of 150 rpm, 28 °C, pH 7 and 1.5 l min−1 aeration. The results confirmed complete degradation of the PAH with a very higher degradation rate of 250 mg l−1 d−1, which is so far the highest value reported for pyrene biodegradation.