Abstract : The removal of synthetic dye Basic Violet 3 using immobilised yeast Candida tropicalis grown on sugarcane bagasse extract medium was investigated. The various immobilization matrices viz. carboxymethyl cellulose, sodium alginate, agar, agarose and polyvinyl alcohol were tested and highest dye removal efficiency (99{\%}) was noted in sodium alginate immobilised beads. The concentration of sodium alginate, bead size and cell concentration were optimized as 3{\%}, 2mm and 3x 106 cells/g bead respectively. The mechanism of dye removal using immobilised yeast cells was elucidated and bioaccumulation was found to be the predominant mechanism over biosorption. The growth of yeast was inhibited completely at higher dye concentration ( {\textgreater}50 mg/l ). Transmission electron microscope (TEM) images confirmed the toxic effect of dye on immobilised C.tropicalis. This is the first report on dye removal using the immobilized yeast cells which could lead to practical application for removal of color from industrial wastewater.