Wild-type ebg enzyme, the second beta-galactosidase of Escherichia coli K12, does not permit growth on lactose. As part of a study of the evolution of new enzymatic functions, I have selected, from a lacZ deletion strain, a variety of spontaneous mutants that grow on lactose and other beta-galactoside sugars. Single point mutations in the structural gene ebgA alter the enzyme so that it hydrolyzes lactose or lactulose effectively; two mutations in ebgA permit galactosylarabinose hydrolysis, while three mutations are required for lactobionic acid hydrolysis. Wild-type ebg enzyme and 16 functional mutant ebg enzymes were purified and analyzed kinetically to determine how the substrate specificities had changed during the directed evolution of these new functions. The specificities for the biologically selected substrates generally increased by at least an order of magnitude via increased Vmax and decreased Km for the substrate. These changes were very specific for the selected substrate, often being accompanied by decreased specificities for other related substrates. The single, double, or triple substitutions in the enzymes did not detectably alter the thermal stability of ebg enzyme.