The present study was undertaken to develop a cost effective stabilized horseradish peroxidase (HRP) for removal of phenol and decolorization of malachite green from synthetic wastewater. As revealed by enzyme stabilization assays, guar gum and galactose improved the stability of HRP successfully in solution state as compared as other additives such as pectin, carrageenan, or starch, respectively. In order to enhance the stability of HRP, combination of galactose and guar gum were effectively optimized together along with pH by constructing an appropriate response surface methodology (RSM). The RSM results suggest 18.25% of galactose and 0.35% of guar gum for maximum stabilization of HRP at 60°C, pH 7.4. In this study, optimization of removal of phenol and decolorization of malachite green using stabilized HRP was successfully carried out. Various process parameters such as aqueous phase of pH (7.4), concentration of enzyme (1.8 U/mL), phenol concentration (0.1 mM), and reaction time of 180 min were optimized effectively to achieve maximum removal of phenol from synthetic waste water. Dye decolorization studies indicated that stabilized HRP (1.2 U/mL) required lower concentration than the native enzyme (2 U/mL) to obtain similar decolorization efficiency. In addition, stabilized enzyme successfully decolorized the dye at 60°C, pH 7.2.