A hydrophilic satd. soln. of lactose in propylene glycol was emulsified with Li, Na, or K oleate or stearate, and transesterified, 2:1 by wt., with hydrophobic Me esters of coconut-oil acids over solid K2CO3 as catalyst. Lactose/emulsifier (Na oleate) mole ratio was fixed at 16.2:1. The emulsion was heated at const. temp. for varying times related to emulsifier type, to yield lactose mono and diesters (15% max.), until spontaneously stratified (> 60% esters); HLB = 3.4. Crude product contained little lactose, catalyst, soaps and dipropyfene glycol, washed away with aq. 10% NaCl. Catalyst amt. (3.7-18.5016) affected reaction yield and product type. With 18.5% catalyst and basic soaps present, propylene glycol condensed nearly completely; pure lactose esters were difficult to sep. At optimum conditions (catalyst, 11.1%; 12 h; 60 degrees C; Na oleate), lactose conversion was 80 + %; crit. micellar concn., 0.195%; min. surface tension, 42.2 mN/m. Stearates were inferior to oleates as emulsifiers: the reaction yield was higher, but the product failed to stratify and esters were isolated with great losses. Cation type was irrelevant to reaction.