beta-Galactosidase was covalently immobilized on the chitosan-coated magnetic nanoparticles activated with glutaraldehyde. The effect of three factors including protein content, pH and time on the yield of immobilization was investigated, and the optimum values were 0.45 mg/ml, 4.9 and 4.9 h, respectively. The maximum yield of immobilization reached 98.8% in term of enzyme activity. The stability of beta-galactosidase significantly was improved after immobilization from 2.5 days to over 6 days of half-life at 60 degrees C and was active in wider ranges of temperature (45-60 degrees C), and pH (4.0-5.5) compared to soluble form. The activity of immobilized enzyme remained 85% of origin after eight recycles (at 60 degrees C, pH 4.5 for 4 h). Different initial lactulose concentrations (0.58-2.34 M) were applied for synthesis of galactooligosaccharides. The maximum yield of galactooligosaccharides was 17% mol/mol at the initial lactulose concentration of 2.34 M at 36 h of reaction. It showed that both hydrolytic and trans-galactosylation activities of beta-galactosidase remained well after immobilization. The kinetic model of immobilized enzyme was determined. These results revealed that immobilized enzyme on chitosan-coated magnetic nanoparticles has application potentials in the production of prebiotic lactulose-based galactooligosaccharides.