This study was designed to isolate bifidobacteria from human intestines that efficiently converts monolinolein, a monoglyceride form of linoleic acid, into conjugated linoleic acid (CLA), as well as to optimize culture conditions for improving CLA production during milk fermentation. Among 150 screened neonatal bifidobacteria, Bifidobacterium breve LMC 520 showed the highest CLA-producing ability and was tested with different types of fat substrates at various concentrations to determine the optimal conditions for CLA production. Monolinolein was tested as a substrate for CLA production. The incubation time optimized for CLA production was 24 h, and CLA production was proportionally increased with monolinolein concentration. The incubation of LMC 520 with commercial starter strains caused minimal reduction in CLA production. Our results demonstrate that the CLA-producing ability of B. breve LMC 520 could offer beneficial effects when utilized as a starter culture for the development of functional dairy products.