The production of galacto-oligosaccharides (GOS) from lactose by Aspergillus oryzae beta-galactosidase immobilized on cotton cloth was studied. A novel method of enzyme immobilization involving PEI-enzyme aggregate formation and growth of aggregates on individual fibrils of cotton cloth leading to multilayer immobilization of the enzyme was developed. A large amount of enzyme was immobilized (250 mg/g support) with about 90-95% efficiency. A maximum GOS production of 25-26% (w/w) was achieved at near 50% lactose conversion from 400 g/L of lactose at pH 4.5 and 40 degreesC. Tri- and tetrasaccharides were the major types of GOS formed, accounting for about 70% and 25% of the total GOS produced in the reactions, respectively. Temperature and pH affected not only the reaction rate but also GOS yield to some extend. A reaction pH of 6.0 increased GOS yield by as much as 10% compared with that of pH 4.5 while decreased the reaction rate of immobilized enzyme. The cotton cloth as the support matrix for enzyme immobilization did not affect the GOS formation characteristics of the enzyme under the same reaction conditions, suggesting diffusion limitation was negligible in the packed bed reactor and the enzyme carrier. Increase in the thermal stability of PEI-immobilized enzyme was also observed. The half-life for the immobilized enzyme on cotton cloth was close to 1 year at 40 C and 21 days at 50 degreesC. Stable, continuous operation in a plug-flow reactor was demonstrated for about 3 days without any apparent problem. A maximum GOS production of 26% (w/w) of total sugars was attained at 50% lactose conversion with a feed containing 400 g/L of lactose at pH 4.5 and 40 degreesC. The corresponding reactor productivity was 6 kg/L/h, which is several-hundred-fold higher than those previously reported.