Lactosucrose (O-β-D-galactopyranosyl-(1,4)-O-α-D-glucopyranosyl-(1,2)-β-D-fructofuranoside) is a trisaccharide formed from lactose and sucrose by enzymatic transglycosylation. This rare trisaccharide is a kind of indigestible carbohydrate, has good prebiotic effect, and promotes intestinal mineral absorption. It has been used as a functional ingredient in a range of food products which are approved as foods for specified health uses in Japan. Using lactose and sucrose as substrates, lactosucrose can be produced through transfructosylation by β-fructofuranosidase from Arthrobacter sp. K-1 or a range of levansucrases, or through transgalactosylation by β-galactosidase from Bacillus circulans. This article presented a review of recent studies on the physiological functions of lactosucrose and the biological production from lactose and sucrose by different enzymes.