Galacto-oligosaccharide (GOS) yields obtained by enzymatic transgalactosylation with β-galactosidases are rather low, so purification of the raw GOS is a major issue. In the quest for improving GOS purification, an additional step of lactose hydrolysis is proposed, using immobilised β-galactosidase and permeabilised cells expressing β-galactosidase activity as biocatalysts. To select the best operational conditions for lactose hydrolysis in raw GOS employing both biocatalysts different enzyme:substrate (lactose) mass ratios were evaluated. Bioconversion of the lactose-hydrolysed raw GOS obtained with the two biocatalyst forms were compared, and biocatalyst reuse was evaluated. Lactose hydrolysis of raw GOS allowed the removal of around 70% of the lactose content and increased the relative GOS content by 20%. Incorporation of the lactose hydrolysis step led to a purity and recovery of GOS of 96–97% and 92–96%, respectively, depending on the biocatalyst used.