The aim of the present work was to improve stability of D-psicose 3-epimerase and biotransformation of fruit and vegetable residues for D-psicose production. The study established that N-terminal fusion of a yeast homolog of SUMO protein - Smt3 - can confer elevated optimal temperature and improved operational stability to D-psicose 3-epimerase. The Smt3-D-psicose 3-epimerase conjugate system exhibited relatively better catalytic efficiency, and improved productivity in terms of space-time yields of about 8.5 kg L (1) day (1). It could serve as a promising catalytic tool for the pilot scale production of the functional sugar, D-psicose. Furthermore, a novel approach for economical production of D-psicose was developed by enzymatic and microbial bioprocessing of fruit and vegetable residues, aimed at epimerization of in situ D-fructose to D-psicose. The bioprocessing led to achievement of D-psicose production to the extent of 25-35% conversion (w/w) of D-fructose contained in the sample. (C) 2016 Elsevier Ltd. All rights reserved.