beta-Galactosidase from Aspergillus oryzae, immobilized on glutaraldehyde-treated chitosan beads, produced galactooligosaccharides (GOS) in a plug reactor. Maximum yields of GOS were 18, 21, 26 with lactose at 100, 200, 300 g/L, respectively. Yields of GOS in the immobilized enzyme system were always lower than that of free enzyme system. In a continuous reaction there was no significant loss of activity after 30 days of operation.