Aspergillus oryzae β-galactosidase was immobilized by three different techniques, namely adsorption on celite, covalent coupling to chitosan and aggregation by cross-linking. These techniques were compared in terms of the yield of immobilized preparation, enzymatic characteristics, stability and efficiency in oligosaccharide synthesis. Immobilization led to increase in Km in each case. Immobilization on chitosan gave maximum enzyme yield and oligosaccharide synthesis. At 60 °C, the chitosan-immobilized enzyme was stabilized (by 1.6-fold) due to protection effect of the matrix. However, at 65 °C, the t1/2 of cross-linked enzyme aggregates (CLEA) of β-galactosidase was 1.07 h as compared to 0.79 h in the case of free enzyme. Both chitosan-immobilized enzyme and CLEA were used for oligosaccharide synthesis. Using 20% (w/v) lactose, the chitosan-immobilized enzyme gave maximum oligosaccharide yield (17.3% of the total sugar) as compared to free enzyme (10.0%) in 2 h at 40 °C. CLEA were instead found effective in lactose hydrolysis yielding 78% monosaccharide in 12 h.