In the present study, beta-d-galactosidase from Bacillus circulans was proved to be a suitable biocatalyst for the production of lactosucrose (beta-d-Galp-(1-->4)-alpha-d-Glcp-(1-->2)-beta-d-Fruf, I) and its analogues from lactose and sucrose. During the hydrolysis of lactose, the formation of four transfer products was followed by high performance liquid chromatography with refraction index detector. In addition, the transfer products were isolated from the reaction mixture and identified to be I, beta-d-Galp-(1-->3)-alpha-d-Glcp-(1-->2)-beta-d-Fruf (II), beta-d-Galp-(1-->4)-beta-d-Galp-(1-->4)-alpha,beta-d-Glcp (III), and beta-d-Galp-(1-->4)-beta-d-Galp-(1-->4)-alpha-d-Glcp-(1-->2)-beta-d-Fruf (IV) by mass spectrometry with an electrospray ionization source and nuclear magnetic resonance spectroscopy. The order for the production of the transfer products was III > I > IV > II in the initial stage of the reaction, and the same relationship was also observed for the hydrolytic rates of transfer products. Furthermore, the effects of synthetic conditions including reaction temperature, reaction time, concentration of substrate, molar ratio of donor/acceptor, and enzyme concentration on the formation of transfer products were examined. We found that the optimal synthetic conditions were different for the production of I and II. Under the optimal conditions, the amount of total transfer products kept increasing during the early 4 h incubation, and a maximum yield of 146 g/L for total transfer products was obtained at 4 h of reaction.