Abstract:  Galacto‐oligosaccharides (GOS) have now been definitely established as prebiotic ingredients after in vitro and animal and human in vivo studies. Currently, GOS are produced by glycoside hydrolases (GH) using lactose as substrate. Converting lactose into GOS by GH results in mixtures containing GOS of different degrees of polymerization (DP), unreacted lactose, and monomeric sugars (glucose and galactose). Recent and future developments in the production of GOS aim at delivering purer and more efficient mixtures. To produce high‐GOS‐content mixtures, GH should not only have good ability to catalyze the transgalactosylation reaction relative to hydrolysis, but also have low affinity for the GOS formed relative to the affinity for lactose. In this article, several microbial GH, proposed for the synthesis of GOS, are hierarchized according to the referred performance indicators. In addition, strategies for process improvement are discussed. Besides the differences in purity of GOS mixtures, differences in the position of the glycosidic linkages occur, because different enzymes have different regiochemical selectivity. Depending on oligosaccharide composition, GOS products will vary in terms of prebiotic activity, as well as other physiological effects. This review focuses on GOS production from synthesis to purification processes. Physicochemical characteristics, physiological effects, and applications of these prebiotic ingredients are summarized. Regulatory aspects of GOS‐containing food products are also highlighted with emphasis on the current process of health claims evaluation in Europe.