Lactose-derived non-digestible oligosaccharides are prominent components of functional foods. Among them, galacto-oligosaccharides (GOS) outstand for being prebiotics whose health-promoting effects are supported on strong scientific evidences, having unique properties as substitutes of human milk oligosaccharides in formulas for newborns and infants. GOS are currently produced enzymatically in a kinetically-controlled reaction of lactose transgalactosylation catalyzed by β-galactosidases from different microbial strains. The enzymatic synthesis of GOS, although being an established technology, still offers many technological challenges and opportunities for further development that has to be considered within the framework of functional foods which is the most rapidly expanding market within the food sector. This paper presents the current technological status of GOS production, its main achievements and challenges. Most of the problems yet to be solved refer to the rather low GOS yields attainable that rarely exceed 40 %, corresponding to lactose conversions around 60 %. This means that the product or reaction (raw GOS) contains significant amounts of residual lactose and monosaccharides (glucose and galactose). Efforts to increase such yields have been for the most part unsuccessful, even though improvements by genetic and protein engineering strategies are to be expected in the near future. Low yields impose a burden on downstream processing to obtain a GOS product of the required purity. Different strategies for raw GOS purification are reviewed and their technological significance is appraised.