Thermal inactivation of immobilized lactase has been studied in the presence of substrate and products. Modulation factors of thermal inactivation have been determined for lactose and galactose based on a two-stage series-type mechanism of inactivation. Galactose was a positive modulator of enzyme stability while the opposite occurred with lactose; the glucose effect was negligible. A model for packed-bed continuous reactor operation with chitin-immobilized lactase from Kluyveromyces marxianus var : marxianus was developed considering modulated thermal inactivation and appropriate kinetic expression for lactose hydrolysis. Experimental results were in good agreement with the model which was afar better- representation of reactor performance than the conventional model not considering the effect of substrate and products on enzyme inactivation.