In the present study, beta-d-galactosidase from Bacillus circulans was proved to be a suitable biocatalyst for the production of N-acetyl-oligosaccharides with lactose and N-acetylglucosamine (GlcNAc) as biocatalyst. During the hydrolysis of lactose, apart from no ultraviolet absorption oligosaccharides such as beta-d-Galp-(1 -> 6)-d-Glcp (6'-allolactose) and beta-d-Galp-(1 -> 4)-beta-d-Galp-(1 -> 4)-d-Glcp (4'-galactosyl-lactose), the formation of four N-acetyl-oligosaccharides was followed by high-performance liquid chromatography with a diode-array detector. The four N-acetyl-oligosaccharides were isolated from the reaction mixture and identified to be as beta-d-Galp-(1 -> 4)-d-GlcpNAc (LacNAc, I), beta-d-Galp-(1 -> 6)-d-GlcpNAc (allo-LacNAc, II), beta-d-Galp-(1 -> 4)-beta-d-Galp-(1 -> 4)-d-GlcpNAc (III), beta-d-Galp-(1 -> 4)-beta-d-Galp-(1 -> 4)-beta-d-Galp-(1 -> 4)-d-GlcpNAc (IV) by authentic standards and the spike technique or high-resolution mass spectrometry with an electrospray ionization source and nuclear magnetic resonance spectroscopy. Furthermore, the effects of synthetic conditions including reaction temperature, concentration of substrate, molar ratio of donor/acceptor and enzyme concentration on the formation of N-acetyl-oligosaccharides were examined. We found that the optimal synthetic conditions were different for production of oligosaccharides with beta-(1 -> 4) linkages and beta-(1 -> 6) linkage. The optimal reaction conditions for I, III and IV were 40 A degrees C, 0.50 M lactose and 0.50 M GlcNAc and 1.0 U/mL of enzyme. Under such conditions, the N-acetyl-oligosaccharides formed were composed of 28.75% of I, 2.29% of II, 9.47% of III and 5.67% of IV. On the other hand, suitable reaction conditions found for II were 40 A degrees C, 0.50 M lactose and 0.50 M GlcNAc and 2.0 U/mL of enzyme.