The synthetic utility of the thermostable beta-glycosidase from Caldocellum saccharolyticum was investigated. The ability of the enzyme to catalyze oligosaccharide and beta-galactopyranoside synthesis from lactose was compared with that of the readily commercially available, moderately thermostable beta-galactosidase (beta-D-galactoside galactohydrolase, EC 3.2.1,23) from Aspergillus oryzae. Generally the C. saccharolyticum enzyme showed significantly greater resistance to inactivation by heat and organic solvent and better yields of product. Although the A. oryzae enzyme gave better oligosaccharide yields at lower lactose concentrations, at higher concentrations (above 50% w/w) the C. saccharolyticum enzyme was significantly better, yielding a sugar mixture containing 42% by weight of tri- plus tetra-saccharides, from a 70% w/w lactose solution, compared with 31% by weight of oligosaccharides with the A. oryzae enzyme. In ethyl galactoside synthesis from ethanol and lactose, neither enzyme appeared to hydrolyze the product to any great extent. Under all conditions rested, the product yield did not peak, even at long reaction times, when most of the lacro;ze had been consumed. The C. saccharolyticum enzyme, however, gave slightly higher product yields and could be used at higher ethanol concentrations without serious loss of activity.