The production of lactose-based sweeteners is considered very promising. Fungal lactase has been immobilized on crosslinked chitin to develop a process for the continuous hydrolysis of demineralized whey permaete. The optimization of lactase immobilization on chitin and chitosan was performed, activities of 4 · 105 and 2.2 · 105 u/kg at yields of 33 and 23% were obtained for both supports, respectively. The chitin based catalyst was selected for further studies and a procedure was developed for in-situ enzyme immobilization. The kinetic behaviour of the catalyst was determined to propose a kinetic model for the initial rate of lactose hydrolysis. Pseudo steady-state and long term operation of packed bed reactors with chitin-immobilized lactase ranging from small laboratory to pre-pilot unit was carried out. The results are discussed and compared with commercial immobilized lactases. Preliminary economic evaluation for the production of ultrafiltered whey protein and hydrolyzed lactose syrup, within a dairy industry in Chile, was satisfactory in terms of profitability, both for the chitin immobilized lactase developed and for a commercial immobilized lactase.