Mutants of Gordonia terrae were generated using chemical mutagens for better activity, stability and higher substrate/product tolerance of its nitrilase enzyme. Mutant E9 showed two-time increase in activity and tolerated p-hydroxybenzonitrile (p-HBN) up to 50 mM. Response surface methodology and inducer mediation approach further enhanced the production of enzyme to 2.5-fold. The bench scale production of p-hydroxybenzoic acid (p-HBA) was carried out in a fed-batch reaction (500-mL scale) using whole-cell nitrilase of mutant E9 in 0.1 M potassium phosphate buffer (pH 8.0) at 40 °C. Total six feedings each at an interval of 45 min resulted in accumulation of 360 mM (21.6 g) of p-HBA with a purity of 99%. The catalytic and volumetric productivity of bioprocess using mutant G. terrae was improved to 1.8 g h(-1) g DCW (-1) and 43.2 g L(-1), respectively, from 0.78 g h(-1) g DCW (-1) and 28.8 g L(-1) using resting cells of wild strain. K m and V max of purified nitrilase from mutant E9 were 55 U mg(-1) and 1.8 mM for p-HBN with a higher turnover number of 36 s(-1) × 10(-3).