Isomaltulose is a low cariogenic sweetener used as a substitute for sucrose in the food industry. In this study, isomaltulose production by Serratia plymuthica ATCC 15928 was performed using free and immobilized cells. Response Surface Methodology was employed to evaluate the influence of temperature, wet cell mass concentration and sucrose concentration during the conversion of sucrose into isomaltulose by free cells. After 2 h of reaction time in shake flasks, a high production of isomaltulose (85.23%) was obtained with a temperature of 25ºC, wet cell mass of 20% (w/v) and sucrose solution of 25% (w/v). The free cells were reused during seven successive batches and resulted in efficient isomaltulose conversion between 83.74 and 67.37%. The production of isomaltulose by immobilized cells in calcium alginate was studied in a packed bed bioreactor during seven days in a continuous process. A conversion yield of sucrose into isomaltulose between 81.26 and 70.89% was obtained, using immobilized cells in calcium alginate Synth® 2% (w/v), sucrose solution of 35% (w/v), wet cell mass of 30% (w/v) and temperature of 25ºC. The conversion of sucrose into isomaltulose remained high using free cells and using immobilized cells in calcium alginate during the period of execution of the experiments.Key words: Isomaltulose, glucosyltransferase, free cells, immobilized cells, Serratia plymuthica