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The study was sought to enhance the synthesis of thermal stable β-cyclodextrin glycosyltransferase (β-CGTase) using potato wastewater as a low-cost medium and assess the degree to which it is efficient for industrial production of β-cyclodextrin (β-CD) from raw potato starch. Thermophilic bacteria producing β-CGTase was isolated from Saudi Arabia and the promising strain was identified as  Bacillus licheniformis  using phylogenetic analysis of the 16S rRNA gene. Alginate-encapsulated cultures exhibited twice-fold of β-CGTase production more than free cells. Scanning electron microscopy (SEM) of polymeric capsules indicated the potential for a longer shelf-life, which promotes the restoration of activity in bacterial cells across semi-continuous fermentation of β-CGTase production for 252 h. The optimal conditions for β-CGTase synthesis using potato wastewater medium were at 36 h, pH of 8.0, and 50°C with 0.4% potato starch and 0.6% yeast extract as carbon and nitrogen sources, respectively. The purified enzyme showed a specific activity of 63.90 U/mg with a molecular weight of ∼84.6 kDa as determined by SDS-PAGE analysis. The high enzyme activity was observed up to 60°C, and complete stability was achieved at 75°C. High levels of activity and stability were shown at pH 8.0, and the pH range from 7.0–10.0, respectively. The enzyme has an appreciable affinity for raw potato starch with a Km of 5.7 × 10 −6  M and a Vmax of 87.71 µmoL/mL/min. β-CD production was effective against 25 U/g of raw potato starch. The outcomes demonstrated its feasibility to develop a fermentation process by integrating the cost-effective production of β-CGTase having distinctive properties for β-CD production with eco-friendly utilization of potato wastewater.

Biosynthesis of raw starch degrading β-cyclodextrin glycosyltransferase by immobilized cells of Bacillus licheniformis using potato wastewater