Lactose is a major component of milk and has been extensively studied over the years. Much work has focused on the manufacture and application of lactose. Lactose and it derivatives have wide physico-chemical and bioactive properties making it appropriate for a wide range of applications food, animal feed, and pharmaceuticals. Primary uses of lactose in the food industry are largely based on its relatively low sweetness, protein stabilizing ability, great crystallization attributes, ability to accentuate flavor/ color and significant nutritional value. Extensive research continues on various fronts as to how to bring added value to lactose and it derivatives in various food and nutraceutical applications. In this presentation, technological advancements and challenges in manufacture of lactose from various product streams (e.g., permeate, acid whey) will be reviewed. The presentation will also review latest research in understanding drivers and inhibitors for lactose crystallization. The role of lactose and its derivatives in various food applications will be discussed with regards to attributes such as product quality and sensory attributes (color, texture, mouthfeel, and sweetness). Nutritional significance of lactose and it derivatives will be discussed in relation to glycemic index, dietary fiber, and mineral absorption. Last, this presentation will focus on the future growth opportunities for lactose and it derivatives.