We have reported that lactobionic acid is produced from lactose by Acetobacter orientalis in traditional Caucasian fermented milk. To maximize the application of lactobionic acid, we investigated favorable conditions for the preparation of resting A. orientalis cells and lactose oxidation. The resting cells, prepared under the most favorable conditions, effectively oxidized 2-10% lactose at 97.2 to 99.7 mol % yield.