Cheese whey-based biohydrogen production was seen in batch experiments via dark fermentation by free and immobilized Enterobacter aerogenes MTCC 2822 followed by photofermentation of VFAs (mainly acetic and butyric acid) in the spent medium by Rhodopseudomonas BHU 01 strain. E. aerogenes free cells grown on cheese whey diluted to 10 g lactose/L, had maximum lactose consumption (similar to 79%), high production of acetic acid (1,900 mg/L), butyric acid (537.2 mg/L) and H-2 yield (2.04 mol/mol lactose; rate,1.09 mmol/L/h). The immobilized cells improved lactose consumption (84%), production of acetic acid (2,100 mg/L), butyric acid (718 mg/L) and also H-2 yield (3.50 mol/mol lactose; rate, 1.91 mmol/L/h). E. aerogenes spent medium (10 g lactose/L) when subjected to photofermentation by free Rhodopseudomonas BHU 01 cells, the H-2 yield reached 1.63 mol/mol acetic acid (rate, 0.49 mmol/L/h). By contrast, immobilized Rhodopseudomonas cells improved H-2 yield to 2.69 mol/mol acetic acid (rate, 1.87 mmol/L/h). The cumulative H-2 yield for free and immobilized bacterial cells was 3.40 and 5.88 mol/mol lactose, respectively. Bacterial cells entrapped in alginate, had a sluggish start of H-2 production but outperformed the free cells subsequently. Also, the concomitant COD reduction for free cells (29.5%) could be raised to 36.08% by immobilized cells. The data suggest that two-step fermentative H-2 production from cheese whey involving immobilized bacterial cells, offers greater substrate to- hydrogen conversion efficiency, and the effective removal of organic load from the wastewater in the long-term.