We report a novel and efficient way of producing lactose-derived galacto-oligosaccharides (GOS) that do not contain remaining lactose and monosaccharides. The initial sugar mixture was obtained by enzymatic transformation at 70 degreesC of a lactose solution of 270 g/liter using recombinant P-glycosidase from the Archaeon Sulfolobus solfataricus. At the optimum reaction time for kinetically controlled transgalactosylation, it contained 46% monosaccharides, 13% lactose and 41% GOS. Lactose was selectively oxidised into lactobionic acid by using fungal cellobiose dehydrogenase which displays a approximate to 100-fold preference for reaction with lactose compared to reaction with GOS. Oxidation of lactose was coupled to reduction of 2,6-dichloro-indophenol which was added in catalytic concentrations. The oxidised redox mediator was regenerated continuously by fungal laccase-catalysed reduction of molecular oxygen into water. Ion exchange chromatographies were employed to remove lactobionic acid, other ions and monosaccharides. The final product contained 97% GOS, 1.2% lactose and 2.1% monosaccharides. The yield accounted for 25% of original lactose. An enzymatic assay for lactose has been developed. It is robust and allows sensitive quantification of the analyte in complex sugar mixtures containing large excesses of monosaccharides and GOS.