Whey from cheese and yoghurt production operations contains useful constituents such as whey protein and lactose. However, the separation and extraction processes are difficult and costly, and hence, whey has limited end user demand and is typically disposed of as waste. Treatment and disposal of these high BOD wastes are both energy intensive and expensive. However, improper disposal of these wastes can pollute surface and ground water resources. The use of these low or negative cost substrates for the production of value-added products such as acetic acid and propylene glycol (PG) is of great significance in changing overhead costs to revenue streams. The present study focuses on bioproduction of acetic acid and PG from whey lactose and whey powder containing lactose and protein as an alternative to high cost nutritive medium. It was found that Lactobacillus buchneri, an acid-tolerant bacterium, is able to ferment lactose at pH similar to 4.2 to low molecular weight compounds such as acetic acid and PG each at 25-30 g L-1 concentration when using lactose as a major carbon substrate. The typical molar ratio of acetic acid to PG was close to 1:1 at the end of fermentation. The productivity of acetic acid and PG was improved using a high cell density fermentation with cotton cheesecloth as an immobilization matrix. The use of whey powder with immobilized fermentation system showed a similar performance to that of cultures fed with pure lactose at pH 4.2, resulting in a 57% conversion of lactose in whey to acetate and PG in total, against a stoichiometric maximum of 72%.