The gene encoding homodimeric β-galactosidase (lacA) from Bacillus licheniformis DSM 13 was cloned and overexpressed in Escherichia coli, and the resulting recombinant enzyme was characterized in detail. The optimum temperature and pH of the enzyme, for both o-nitrophenyl-β-D: -galactoside (oNPG) and lactose hydrolysis, were 50°C and 6.5, respectively. The recombinant enzyme is stable in the range of pH 5 to 9 at 37°C and over a wide range of temperatures (4-42°C) at pH 6.5 for up to 1 month. The K(m) values of LacA for lactose and oNPG are 169 and 13.7 mM, respectively, and it is strongly inhibited by the hydrolysis products, i.e., glucose and galactose. The monovalent ions Na(+) and K(+) in the concentration range of 1-100 mM as well as the divalent metal cations Mg²(+), Mn²(+), and Ca²(+) at a concentration of 1 mM slightly activate enzyme activity. This enzyme can be beneficial for application in lactose hydrolysis especially at elevated temperatures due to its pronounced temperature stability; however, the transgalactosylation potential of this enzyme for the production of galacto-oligosaccharides (GOS) from lactose was low, with only 12% GOS (w/w) of total sugars obtained when the initial lactose concentration was 200 g/L.