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The transgalactosylase activity of β-galactosidase produces galacto-oligosaccharides (GOSs) with prebiotic effects similar to those of major oligosaccharides in human milk. β-Galactosidases from Bacillus circulans ATCC 31382 are important enzymes in industrial-scale GOS production. Here, we show the high GOS yield of β-galactosidase II from B. circulans (β-Gal-II, Lactazyme-, compared to other commercial enzymes. We also determine the crystal structure of the five conserved domains of β-Gal-II in an apo-form and complexed with galact