After both a lactase gene (LAC4) and its transcriptional activator gene (LAC9) were expressed in Kluyveromyces marxianus KM-69 which was a glucose-derepressed mutant, one transformant called KM-L9-20 grown in an optimized whey medium for lactase production could produce 77.8 +/- 4.0 U/ml of lactase activity at a flask level within 36 h. At the same time, expression of the LAC4 gene and its transcriptional activator gene in the transformant KM-L9-20 were also greatly enhanced compared to that of the LAC4 gene and the LAC9 gene in its parent strain K. marxianus KM-69. 157.9 +/- 3.2 U/ml of lactase activity was yielded by the transformant KM-L9-20 within 84 h during a batch fermentation while 274.7 +/- 4.3 U/ml of lactase activity was produced within 48 h during a fed-batch fermentation. The produced lactase could actively transform lactose into the galacto-oligosaccharides which contained mainly trisaccharides. The optimal conditions for the transgalactosylation reaction were that the lactose concentration, the reaction temperature, pH and the lactase dose were 400 g/l of lactose, 40 degrees C, 6.5 and 25 U/g of lactose, respectively. Therefore, the transformant KM-L9-20 and the produced lactase had highly potential applications in biotechnology.