The β-galactosidase is a large tetrameric structure enzyme which is naturally present in various sources such as mammals, microorganisms (bacteria, yeast and fungi) and plants. It belongs to glycoside hydrolase family that hydrolyses the lactose into glucose and galactose. The β-galactosidase also synthesizes galactooligosaccharides through transgalactosylation mechanism. Therefore, the β-galactosidase is commonly used for industrial applications such as to prepare lactose free milk and milk products, galactooligosaccharides production (prebiotic) from pure lactose and whey, and biosensor application. The β-galactosidase is commercially produced from E. coli, Bacillus, Kluyveromyces and Aspergillus species through recombinant protein expression approach to obtain higher yields of pure, stable and highly functional enzyme compared to native organism. Several genome editing tools such as site-directed mutagenesis, truncation, site-saturation mutagenesis, random mutagenesis, DNA shuffling and monobody modifications are used to improve the characteristics of β- galactosidase. These techniques help to improve the functional properties of β-galactosidase such as transgalactosylation activity, broader substrate specificity, stability to extreme environmental factors (temperature, pH, etc.), and susceptibility to reaction product products.