An enzyme β-galactosidase or β-galactohydrolase [EC3.2.1.23], commonly called lactase, mediates galacto-oligosaccharide (GOS) synthesis under conditions of high substrate concentrations. Also, lactase hydrolyzes β(1→4) lactose into glucose and galactose, the latter is successively transferred to free lactose to make various oligosaccharides via transgalactosylation. GOS is non-digestible to human digestive enzymes and has been used as a functional prebiotics. Among the 24 lactic acid bacteria (LAB) strains used, Lactobacillus paracasei YSM0308 was selected based on its exhibition of the highest β-galactoside hydrolysis activity, and the crude lactase was prepared for examination of reaction conditions to affect the GOS synthesis. Lactase activity was measured with a spectrophotometer using ONPG (o-nitropheyl β-D-galactopyranoside) method. Lactase activity was not detected in the culture supernatant and was mostly present in the cell pellet after centrifugation. Activity of the crude lactase preparation ranges from102 to 1,053 units/mL, with the highest activity determined for L. paracasei YSM0308. Optimal conditions for GOS synthesis are as follows: concentration of whey powder, pH, temperature, and time were 30%, pH 6.5-7.0, 30oC, and 4 h, respectively. The final GOS concentration was 19.41% (w/v) by the crude YSM0308 lactase, which was obtained from strain YSM0308 grown in the 10% (w/v) reconstituted whey-based medium.