The present study was aimed to isolate and characterize Lactic acid bacteria and its potential application as a probiotics. Total 10 isolates were isolated from 6 different samples. These isolates were screened and characterized morphologically and biochemically. The initial screening yielded 10 isolates which were found to be Gram-positive and catalase negative. All the Isolates were further checked for their probiotics properties by performing Acid-bile tolerance, NaCl tolerance and phenol tolerance tests. The safety of red blood cells with these isolates was evaluated by performing haemolytic activity. Probiotics were also checked for their survival in an acidic environment (pH 3) during transits in the gastric to arrive the large intestine in adequate amounts to allow for colonization and reproducing. Microencapsulation in alginate was done to protect the probiotics cells from stimulated gastro-intestinal tract. The stability of alginate beads to minimize the loss of encapsulated materials and the beads were coat with polycationic polymers of Chitosan. Chitosan and gelatin were used as a coating agent for increasing the survival rates of encapsulated LAB in intestinal fluid. Shrikhand, an indigenous fermented milk product was also prepared by using these immobilized cells.