Enzymatic hydrolysis and transgalactosylation of stevioside (St) were investigated using a β-galactosidase from Sulfolobus sp. The hydrolysis yielded steviol as the main final product. Under the optimal transgalactosylation conditions, the highest conversion of stevioside was 87.3% with lactose as a donor, several galactosylated products (St-Gals) were obtained. Metal ions such as Na⁺, K²⁺, Ca²⁺, Ba²⁺, Mn²⁺ and Mg²⁺ (2 mM) did not affect the transgalactosylation activity, while Fe²⁺, Fe³⁺ and Cu²⁺ reduced the transgalactosylation activity of β-galactosidase to 64%, 33% and 18%, respectively.