Cyclodextrin (CD) is an important substance for chemical, pharmaceutical, and food industries. Conventionally, free Escherichia coli (E. coli) cells expressing recombinant cyclodextrin glucanotransferase (CGTase) are used as the biocatalyst for CD production, but the process struggles with low CGTase excretion and CD yield. In this study, E. coli cells were immobilized on hollow‐fiber membranes for β‐CD production, and the process and reaction parameters were optimized via response surface methodology. The reusability of the immobilized cells was also evaluated. The parameter optimization significantly improved β‐CD yield and CGTase excretion, making the process more attractive for industrial applications. The immobilized cells also revealed to be reusable multiple times.