Hydrolyzes lactose, o-nitrophenyl-beta-D-galactopyranoside (ONPG), p-nitrophenyl-beta-D-galactopyranoside (PNPG), 5-bromo-4-chloro-3-indolyl-beta-D-galactopyranoside (X-gal), o-nitrophenyl-beta-D-fucopyranoside, p-nitrophenyl-beta-D-mannoside, o-nitrophenyl-beta-D-glucoside, p-nitrophenyl-beta-D-xyloside, p-nitrophenyl-beta-D-cellobioside, p-nitrophenyl-beta-D-arabinoside, p-nitrophenyl-beta-D-lactoside, p-nitrophenyl-beta-D-galacturonide, p-nitrophenyl-beta-D-glucuronide and p-nitrophenyl-alpha-D-galactoside with highest level of activity with ONPG as substrate, intermediate level of activity with PNPG and lower levels of activity with all other chromogenic nitrophenyl analogs. Able to hydrolyze 34% of milk lactose after 60 minutes at 5 degrees Celsius. Hydrolysis of terminal non-reducing beta-D-galactose residues in beta-D-galactosides. No activity lost during treatment with 100 mM EDTA after 2 hours, and the addition of 1 mM MgCl(2), 1 mM CaCl(2) or 1 mM MnCl(2) has no effect. However, the enzyme activity is inhibited by Zn(2+), Cu(2+), Ni(2+) and Co(2+) to different extents. Addition of Na(+) or K(+) slightly stimulates the enzyme activity at low concentrations and the optimal concentration is 250 mM. A further increase of their concentration of ions above the optimum value results in a decrease in enzyme activity. The enzyme is still active even in the presence of Na(+) or K(+) at a concentration up to 5 M. Optimum pH is 6.8. Exhibits above 80% of its maximal activity in the pH range 6.0-8.0 using ONPG as substrate at 20 degrees Celsius. Optimum temperature is 20 degrees Celsius. Lowering or raising the temperature from 20 degrees Celsius results in reduction of activity when ONPG is used as substrate. Rather stable at or below 25 degrees Celsius, but loses 58% of activity after 30 minutes at 40 degrees Celsius. Loses all activity in only 10 minutes at 45 degrees Celsius. Exhibits 27% of maximal activity even at 0 degrees Celsius, but enzyme activity decreases with a further increase in temperature until it is undetectable above 50 degrees Celsius. Homodimer. Could conceivably be developed to fulfill the practical requirements to enable its use for lactose removal in milk and dairy products at low temperature or a reporter enzyme for psychrophilic genetic systems. Belongs to the glycosyl hydrolase 42 family.