Para‐hydroxybenzoic acid (PHBA) has great potential in biological applications due to its putative antiviral activity against SARS‐CoV‐2 and its antimicrobial activity in the face of the radically increasing number of multidrug‐resistant pathogens. This is in addition to its antimutagenic, anti‐inflammatory, antioxidant, hypoglycemic, antiestrogenic, and antiplatelet aggregating activities. In this study, an approximate sixfold increase in the production of PHBA was achieved via biotransformation of caffeic acid by Candida albicans. The improvement was performed in two steps: first, through mutation by gamma irradiation (5 KGy dose), resulting in the recovery of a mutant (CI‐24), which produced approximately triple the amount of PHBA produced by the wild‐type isolate. Then, biotransformation by this mutant was further optimized via response surface methodology model‐based optimization. The maximum PHBA production (7.47 mg/mL) was obtained in a fermentation medium composed of 1% w/v yeast extract as a nitrogen source, with an initial pH of 6.6, incubated at 28 °C at an agitation rate of 250 rpm. To further enhance the performance and economics of the process, cells of the CI‐24 mutant were immobilized in calcium alginate beads and could retain an equivalent biotransformation capacity after three successive biotransformation cycles.