A recombinant β-galactosidase from Sulfolobus solfataricus produced galactooligosaccharides (GOS) from lactose by transgalactosylation. The enzyme activity for GOS production was maximal at pH 6.0 and 85°C. The half-lives of the recombinant β-galactosidase at 70, 75, 80, 85, and 90°C were 700, 111, 72, 43, and 2.4 h, respectively, and its deactivation energy was 213 kJ mol −1 . The optimal amount of enzyme for effective GOS production was 3.6 U of enzyme ml −1 . GOS production increased with increasing lactose concentration, whereas the yield of GOS from lactose was almost constant. The rates of hydrolysis and transgalactosylation reactions increased with increasing temperature but the final concentration of GOS was maximal at 80°C. Under the conditions of pH 6.0, 80°C, 600 g lactose l −1 , and 3.6 U enzyme ml −1 , 315 g GOS l −1 were obtained for 56 h with a yield of 52.5% (w/w). The β-galactosidase from S. solfataricus produced GOS with the highest concentration and yield among thermostable β-galactosidases reported to date.