Genipin is the bioactive compound of geniposide and a natural cross-linking agent. In order to improve the preparation process of genipin, the hydrolysis of geniposide to genipin by immobilized β-glucosidase in an aqueous-organic two-phase system was studied. β-glucosidase was immobilized by the crosslinking-embedding method using sodium alginate as the carrier. The optimum reaction temperature, pH value and time were 55 °C, 4.5 and 2.5 h, respectively. To reduce genipin hydrolysis and byproduct production the reaction was carried out in an aqueous-organic two-phase system comprising ethyl acetate and sodium acetate buffer. The product was analyzed by HPLC, UV, IR, and NMR. The yield of genipin was 47.81% and its purity was over 98% (HPLC).