Lactase (β-D-galactosidase EC 3.2.1.23) was immobilized in yeast cells of the genus Kluyveromyces. Comparison of various solvents or polycations led to the selection of a chloroform-ethanol mixture for cell permeabilization. The lactase was confined inside the ghosts, with a minimum deactivation, by treatment with 0.4% glutaraldehyde. The combined procedure, permeabilization by chloroform-ethanol and confinement by glutaraldehyde, was applied to strain, K. lactis CBS 683, yielding a biocatalyst with an activity of 3.8 units ONP per milligram dry weight as calculated from Vmax. The biocatalyst could be stored in suspension at 4°C for 14 months with 20% deactivation.