This paper reports biotransformation of (L)-citronellal to (L)-citronellol using free and immobilized cells of Rhodotorula minuta. The culture preparation variables such as pH, temperature and incubation period for obtaining maximum cell growth of R. minuta were optimized. The optimized culture conditions for free and immobilized cells of R. minuta. have been compared for (L)-citronellal biotransformation. The various factors such as the optimum substrate concentration and the time of substrate addition at varying cell concentrations during the growth of yeast culture were also studied. Highest (L)-citronellol concentration of 3.5 gl^-1 was obtained with free cell catalyzed biotransformation at pH 5.5, 27ºC and 150 rpm after 8 hrs using initial (L)-citronellal concentration of 4.47 gl^-1. Alginate immobilized R. minuta cells could optimally biotransform similar substrate concentration to 3.3 gl^-1 (L)-citronellol at pH 6, 27ºC and 150 rpm after 8 hrs. Immobilized cells could be reused twice after the first run and the product concentrations of 2.63 gl^-1 and 1.52 gl^-1 were obtained during the first and the second reuse.