The lacLM genes from Lactobacillus sakei Lb790, encoding a heterodimeric β-galactosidase that belongs to glycoside hydrolase family GH2, were cloned and heterologously expressed in Escherichia coli . Subsequently, the recombinant β-galactosidase LacLM was purified to apparent homogeneity and characterized. The enzyme is a β-galactosidase with narrow substrate specificity because o-nitrophenyl-β-D-galactopyranoside (oNPG) was efficiently hydrolyzed, whereas various structurally related oNP analogues were not. The K(m) and k(cat) values for oNPG and lactose were 0.6 mM and 180 s(-1) and 20 mM and 43 s(-1), respectively. The enzyme is inhibited competitively by its two end-products D-galactose and D-glucose (K(i) values of 180 and 475 mM, respectively). As judged by the ratio of the inhibition constant to the Michaelis constant, K(i)/K(m), this inhibition is only very moderate and much less pronounced than for other microbial β-galactosidases. β-Galactosidase from L. sakei possesses high transgalactosylation activity and was used for the synthesis of galacto-oligosaccharides (GalOS), employing lactose at a concentration of 215 g/L. The maximum GalOS yield was 41% (w/w) of total sugars at 77% lactose conversion and contained mainly non-lactose disaccharides, trisaccharides, and tetrasaccharides with approximately 38, 57, and 5% of total GalOS formed, respectively. The enzyme showed a strong preference for the formation of β-(1→6)-linked transgalactosylation products, whereas β-(1→3)-linked compounds were formed to a lesser extent and β-(1→4)-linked reaction products could not be detected.