Pure lactose is being used increasingly by food industries because of its many unique characteristics. Its availability, low price, high nutritive value, low hygroscopicity plus good solubility make the incorporation of lactose attractive into many foods. It is used in baked goods, to impart moisture retaining tenderizing, and collar-appealing properties. Lactose is widely by used in baby- formulas and pharmaceuticals. Lactose is milk sugar that enzyme lactase breaks down. For want of lactase most adults cannot digest milk. In populations that drink milk, the adults have more lactase perhaps through natural selecties. About 1-4 % of milk input to dairies and creameries is wasted. The economic and nutritional value of this wastage is calculated. Attempts mover the wastage have been made in some instances but it is doubtful if recovery process is economically justifiable. A major part of the paper is concerned with whey, which constitutes a special problem, the extent of which is described and the nutritional value of the whey wastage calculated. Methods of treatment are discussed. «Conventional» treatments, including drying, direct animal feeding and lactose extraction, are briefly described together with newer «unconventional» treatments at greater length. These «unconventional» processes - gel filtration, ion exchange and ultrafiltration – generally aim at extracting the 0.7 % of true protein from whey in undenatured form. Ultrafiltration is now reaching a commercial scale. All three processes produce a lactose-rich by-product which, for economic success, must be utilised. Possible lactose utilisation includes fermentation either to a protein-rich biomass or other product e.g. alcohol, or by enzimic conversion to galactose/glucose syrup which may have a relatively ready acceptability in foodstuffs for subsequent f mentation. Neither process is yet established cm a commercial scale.