Production of biohydrogen from distillery effluent was carried out by using Klebsiella oxytoca ATCC 13182. The work focuses on optimization of pH, temperature, and state of bacteria, which are the various affecting factors for fermentative biohydrogen production. Results indicates that at 35 °C for suspended cultures, the production was at its maximum (i.e., 91.33 ± 0.88 mL) when compared with other temperatures. At 35 °C and at pH 5 and 6, maximum productions of 117.67 ± 1.45 and 111.67 ± 2.72 mL were observed with no significant difference. When immobilized, Klebsiella oxytoca ATCC 13182 was used for biohydrogen production at optimized conditions, production was 186.33 ± 3.17 mL. Hence, immobilized cells were found to be more advantageous for biological hydrogen production over suspended form. Physicochemical analysis of the effluent was conducted before and after fermentation and the values suggested that the fermentative process is an efficient method for biological treatment of wastewater.