The high cellulase enzyme dosages required for hydrolysis of cellulose is a major cost challenge in lignocellulosic ethanol production. One method to decrease the enzyme dosage and increase biocatalytic productivity is to re-use β-glucosidase (BG) via immobilization. In the present research, glutaraldehyde cross-linked BG was entrapped in calcium alginate gel particles. More than 60% of the enzyme activity could be recovered under optimized conditions, and glutaraldehyde cross-linking decreased leakage of BG from the calcium alginate particles. The immobilized BG aggregates were visualized by confocal laser scanning microscopy (CLSM). The CLSM images, which we believe are the first to be published, corroborate that more BG aggregates were entrapped in the matrix when the enzymes were cross-linked by glutaraldehyde as opposed to when they are not cross-linked. The particles with the immobilized BG were recycled for cellulase catalyzed hydrolysis of Avicel. No significant loss in BG activity was observed for up to 20 rounds of reaction recycle steps of the BG particles of 48 h each, verifying a significant stabilization of the BG by immobilization. Similar high glucose yields were obtained by one round of enzymatic hydrolysis of hydrothermally pretreated barley straw during a 72 h reaction with immobilized BG and free BG.