Lactase was produced by Streptococcus salivarius subsp. thermophilus grown on deproteinized whey. Maximum lactase production in 6.85 per cent whey supplemented with certain nutrients was 54.5 U/ml. Lactase was purified by ammonium sulfate and acetone fractionation and gel filtration. It was immobilized on chitin and chitosan by covalent binding. Lactase immobilized on chitosan had the highest activity for hydrolysis of whey lactose. The maximum amount of glucose produced by the immobilized lactase was 20 per cent of lactose during conversion of 71 per cent lactose in 6h. Xanthomonas campestris was able to convert glucose, galactose, mixture of them, lactose, or whey to xanthan, where the yield was 86, 67, 83, 2, and 1.8 per cent respectively, after 72h in batch fermentation. When deproteinized whey, which was hydrolyzed by immobilized lactase, was used for xanthan production. The synthesis of xanthan was generally as good as with comparable conventional media, the yield reached to 65 per cent.