The objective of this study was to evaluate the joint effects of various processing and formulation variables on the properties of spray-dried beta-galactosidase using statistically designed experiments. The key response variables evaluated were product yield, residual enzymatic activity, moisture content and particle size and appearance. The residual enzymatic activity and product yield were significantly affected by the processing variables. The highest product yields were obtained when the drier outlet temperature was relatively high, resulting in extensive protein denaturation. Subsequent experiments, therefore, compared the relative effectiveness of four stabilizers (mannitol, sucrose, arginine hydrochloride and trehalose) in terms of their ability to preserve enzymatic activity during the spray-drying process and during long-term storage. Trehalose was the most suitable stabilizer. The effect of a number of other formulation variables (total solids level, ratio of stabilizer to protein, presence of surfactant and presence of buffer) was also investigated. A final formulation consisting of 6% beta-galactosidase and 10% trehalose in deionized water was selected. Spray-drying at inlet and outlet temperatures of 140 and 95 degrees C, respectively, results in greater than 70% yields of a fully active product with a moisture content of 2-5% and a mean particle size of 2-4 microns.