Whole cell biocatalysts for biodiesel production have garnered significant attention in recent years, as they can help avoid the complex procedures of isolation, purification, and immobilization of extracellular lipase. Because of its renewability and biodegradability, loofah (Luffa cylindrica) sponge is an advantageous substitute for traditional biomass carriers in whole cell immobilization. Rhizopus oryzae mycelia can spontaneously attach onto loofah sponge particles (LSPs) during cell cultivation. The highest immobilized R. oryzae cells concentration can reach up to 1.40 g/1 g of LSPs. The effects of biocatalyst addition and water content on methanolysis for biodiesel production were investigated in this paper. The operational stability of glutaraldehyde-treated biocatalyst at 35 °C, using a 1:1 oil-to-methanol ratio, was assayed, revealing a 3.4-fold increase in half-life compared with the untreated biocatalyst. Under optimized conditions, the yield of methyl esters in the reaction mixture reached 82.2% to 92.2% in each cycle. These results suggested that loofah sponge is a potential fungi carrier for an immobilized whole-cell biocatalyst.