A novel intracellular β-glucosidase was isolated from a wild type of yeast Trichosporon sp. Production of enzyme was stimulated with highest level of production in medium containing 1 % lactose as a sole carbon source at pH 7 and 30 ^oC for 48 hr. The enzyme preparation exhibits activity towards several β-glucosidic substrates, indicating that, it has broad- specificity; furthermore the activity towards lactose hydrolysis was the highest compared with other substrates. Also, it was able to catalyze transglycosylation. Therefore it was used for milk lactose hydrolysis as well as oligosaccharides production. It has, thus potential use in food industry.