The extracellular urease from Arthrobacter creatinolyticus was partially purified by ammonium sulfate precipitation and immobilized on PAN [poly(acrylonitrile–methylmethacrylate –sodium vinylsulfonate)] membrane. The urease immobilized PAN membrane exhibited an activity of 97.92 U/cm² under the optimum conditions of 1.0% enzyme concentration, 15% glutaraldehyde, 24 h immobilization time and temperature of 4 °C. The changes in surface morphology of the membrane after immobilization were studied by SEM and ATR-FTIR analysis. Immobilized membrane was associated with potentiometric electrode for calibration of biosensor and the results showed a linear response for wide range of urea concentration from 1 to 100 mM. The immobilized urease had good storage stability for a period of 70 days at 4 °C and could be effectively reused for 13 cycles. Urease immobilized membrane was also employed in analysis of urea spiked milk samples.