Calcium alginate-starch entrapped bitter gourd peroxidase has been employed for the treatment of a textile industrial effluent in batch as well as in continuous reactor. The textile effluent was recalcitrant to decolorization by bitter gourd peroxidase; thus, its decolorization was examined in the presence of a redox mediator, 1.0 mM 1-hydroxybenzotriazole. Immobilized enzyme exhibited same pH and temperature optima for effluent decolorization as attained by soluble enzyme. Immobilized enzyme could effectively remove more than 70% of effluent color in a stiffed batch process after 3 h of incubation. Entrapped bitter gourd peroxidase retained 59% effluent decolorization reusability even after its tenth repeated use. The two-reactor system containing calcium alginate-starch entrapped enzyme retained more than 50% textile effluent decolorization efficiency even after 2 months of its operation. The absorption spectra of the treated effluent exhibited a marked difference in the absorption at various wavelengths as compared to untreated effluent. The use of a two-reactor system containing immobilized enzyme and an adsorbent will be significantly successful for treating industrial effluents at large scale, and it will help in getting water free from aromatic pollutants.