In an attempt to improve the productivity of β-galactosidase from Bacillus sp. A1, which was isolated from soil and has remarkably higher transgalactosylation activity than lactose hydrolysis activity, a chemical mutation procedure using N-methyl-N`-nitro-N-nitrosoguanidine followed by selection was conducted. The final selection, designated as Bacillus sp. A4442, turned out to show a substantially increased enzyme productivity. Catabolite repression by glucose and lactose requirement as an inducer for the enzyme biosynthesis, which were shown in the parent strain, was markedly diminished; instead it was found out that galactose acts as another inducer. Because pH of medium, one of the most important factors for cell growth as well as enzyme production, is closely related with the sugar concentration during culture, it was kept in the optimum range of 6.5∼7.5; for this the initial glucose concentration was adjusted to be 0.5% which was thereafter maintained by the controlled pumping-in of lactose using the pH-stat technique. By doing so, we were able to increase the productivity of β-galactosidase with high transgalactosylation activity up to 44 U/㎖-broth.