Rhodotorula mucilaginosa, producing the ethyl carbamate (EC)-degrading enzyme, urethanase, was newly isolated from the Chinese rice wine making process. It removed 80 % of EC when it was incubated with 5.0 g/L EC. It grew and stably produced urethanase, with pH ranging from 7.0 to 3.0. In addition, urethanase production by R. mucilaginosa was systematically optimized. Glucose, yeast extract, peptone, and inoculum size were selected with the Plackett-Burman design. They were further optimized via uniform design and determined to be 24.6 g/L, 2.5 g/L, 23.1 g/L, and 65.8 mL/500 mL, respectively. Urethanase activity reached 4,340.0 U/L in the optimal fermentation condition. Furthermore, cell immobilization of R. mucilaginosa in calcium alginate/chitosan was applied to improve cell resistance to environmental stresses. The immobilized cells removed 51.6 % of EC in commercial rice wine, which was 10 times more than that of the free cells. It indicated that the immobilized R. mucilaginosa was effective for degrading EC.