This paper reports the biotransformation of carvone, limonene, β-pinene, thymol, and linalool using whole-cell-immobilized microalgal strains isolated from paddy fields of Iran. The strains was recognized by morphological characterization and assigned according to amplified 16S/18S rRNA genes by PCR. Ten unialgal strains including Chlorella, Oocystis, Chlamydomonas, and Synechococcus were immobilized in calcium alginate beads. After a 24-h incubation with substrates, characterization and identification of biotransformation products were done by GC/MS. None of the isolated immobilized microalgae converted β-pinene. In contrast, most of these strains biotransformed carvone and limonene to the related compounds. Some strains only reduced the C=C double bond to yield the dihydrocarvone isomers while others reduced the ketone to give the dihydrocarveol. The transformation ratio showed that Oocystis sp. MCCS 033 and Synechococcus sp. MCCS 035 produced dihydrocarvone isomers with the highest efficiency. Furthermore, limonene was converted into a mixture of five corresponding products and the maximum yield was 52.1% for carvone, the bioconverted product. Only one strain, Synechococcus sp. MCCS 034, oxidized thymol, and the product obtained from thymol was thymoquinone. Also, linalooloxide isomers and dihydrolinalool were obtained from linalool, and finally dihydrolinalool was the main product. These results showed a novel conversion pathway of linalool-forming dihydrolinalool.