The gene for cellobiose 2-epimerase (CE) from Ruminococcus albus NE1 was overexpressed in Escherichia coli cells. The recombinant CE was purified to homogeneity by a simple purification procedure with a high yield of 88%, and the molecular mass was 43.1 kDa on sodium dodecyl sulfate polyacrylamide gel electrophoresis and 44.0 kDa on gel chromatography. It exhibited optimal activity around at 30 degrees C and pH 7.5, and the enzyme activity was inhibited by Al3+, Fe3+, Co2+, Cu2+, Zn2+, Pb2+, Ag+, N- bromosuccinimide, iodoacetate, and 4-chloromercuribenzoate. In addition to cello-oligosaccharides, the enzyme was found to effectively 2-epimerize lactose to yield 4-O-beta-D-galactopyranosyl-D-mannose (epilactose), which occurs in cow milk as a rare oligosaccharide. The K-m and k(cat)/K-m values toward lactose were 33 mM and 1.6 s(-1) mM(-1), and those toward cellobiose were 13.8 mM and 4.6 s(-1) mM(-1), respectively. N-Acetyl-D-glucosamine, uridine 5'-diphosphate-glucose, D-glucose 6-phosphate, maltose, sophorose, laminaribiose, and gentiobiose were inert as substrates for the recombinant CE. We demonstrated that epilactose was resistant to rat intestinal enzymes, utilized by human adult bifidobacteria, and stimulated the tight junction permeability in Caco-2 cells. These results strongly suggest that this rare disaccharide is promising for use as a prebiotic.