Galactooligosaccharides (GOS) were synthesized by beta-galactosidase (Escherichia coli) under controllable water concentration in reverse micelles. The products were precipitated by adding acetonitrile, and then separated by a semi-preparative HPLC column. Allolactose as one of the major products was purified and verified by the C-13 NMR analysis. The highest production of GOS was 29.7% (w/w) allolactose and 14% of other oligosaccharides Under experimental conditions of pH 6.5, 37degreesC and molar ratio of water to surfactant W-o = 19.32. Increasing W-o decreased the production of GOS. Increasing temperature did not enhance the synthesis of GOS, but more allolactose (45%) could be produced at 45degreesC, pH 6.5 and W-o = 19.32. This study proposes a transgalactosylation model that involves free water in reverse micelles and shows a good correlation with experimental data. (C) 2003 Elsevier Inc. All rights reserved.