α-Arbutin has been used in the cosmetic industry as a skin-whitening agent and in pharmaceutical applications. It can be synthesised by a chemical reaction and a microbial enzyme. This investigation aims to study the production of α-arbutin by microbial fermentation, using whole cells of Bacillus subtilis TISTR 1248 or Xanthomonas campestris TISTR 2065 as a biocatalyst for the transglucosylation reaction between hydroquinone and disaccharide (sucrose and maltose). The amount of α-arbutin in the biotransformation medium under different concentrations of hydroquinone, disaccharides and ascorbic acid was analysed by a high-performance liquid chromatography (HPLC) technique. The results showed that X. campestris TISTR 2065 was more effective than B. subtilis TISTR 1248 on α-arbutin production. The production yield obtained from using sucrose or maltose as a donor was not statistically different. The addition of ascorbic acid resulted in a slight increase in α-arbutin production, spending less time to reach the maximum yield. The maximum production of α-arbutin of approximately 366.33 ± 21.13 mg/l (day 12) was achieved from the biotransformation medium containing 5%w/v hydroquinone and 3%w/v sucrose together with 0.2 mM ascorbic acid by X. campestris TISTR 2065. The elucidation of the α-arbutin structure and the biological activity of the biotransformation mixture containing α-arbutin needs further investigation.