Background: D-Hydroxyphenylglycine is considered to be an important chiral molecular building-block of antibiotic reagents such as pesticides, and β-lactam antibiotics. The process of its production is catalyzed by D-hydantoinase and D-carbamoylase in a two-step enzyme reaction. How to enhance the catalytic potential of the two enzymes is valuable for industrial application. In this investigation, an Escherichia coli strain genetically engineered with D-hydantoinase was immobilized by calcium alginate with certain adjuncts to evaluate the optimal condition for the biosynthesis of D-carbamoyl-p-hydroxyphenylglycine (D-CpHPG), the compound further be converted to D-hydroxyphenylglycine (D-HPG) by carbamoylase. Results: The optimal medium to produce D-CpHPG by whole-cell immobilization was a modified Luria-Bertani (LB) added with 3.0% (W/V) alginate, 1.5% (W/V) diatomite, 0.05% (W/V) CaCl2 and 1.00 mM MnCl2.The optimized diameter of immobilized beads for the whole-cell biosynthesis here was 2.60 mm. The maximized production rates of D-CpHPG were up to 76%, and the immobilized beads could be reused for 12 batches. Conclusions: This investigation not only provides an effective procedure for biological production of D-CpHPG, but gives an insight into the whole-cell immobilization technology.