With increasing health awareness worldwide, lactose intolerance has become a major concern of consumers, creating new market opportunities for low-lactose/lactose-free dairy foods. In recent years, through innovating processes and technologies, dairy manufacturers have significantly improved the variety, and functional and sensory qualities of low-lactose and lactose-free dairy products. Based on this, this paper first covers the pathology and epidemiology of lactose intolerance and market trends. Then, we focus on current advantages and disadvantages of different lactose hydrolysis technologies and improvements in these technologies to enhance nutritional value, and functional, sensory, and quality properties of lactose-free dairy products. We found that more and more cutting-edge technologies are being applied to the production of lactose-free dairy products, and that these technologies greatly improve the quality and production efficiency of lactose-free dairy products. Hopefully, our review can provide a theoretical basis for the marketing expansion and consumption guidance for low-lactose/lactose-free dairy products.