Methylene blue (MB) commonly found in the textile industry effluent has been chosen as a model dye to investigate bioremediation using Bacillus subtilis MTCC 441. Both free cells and calcium alginate immobilized cells have been used to remove MB from the effluent. The operating variables of initial concentration of dye (20–60 mg/L), inoculum size (4–8%) and temperature (25–35 °C) have been varied judiciously during the kinetic study in a batch contactor. A maximum removal of 91.68% is obtained when 20 mg/L MB solution was inoculated with 8% inoculum and cultured for 6 h at 30 °C. Continuous removal of MB has been studied in a fixed bed contactor using immobilized cells as packing materials. Influent concentration (10–30 mg/L) was varied and breakthrough parameters have been determined. With increase in influent concentration from 10 mg/L to 30 mg/L, percentage removal of dye decreases from 72.44% to 49.62%.