The present invention concerns a new .alpha.-galactosidase withtransgalactosylating activity isolated fromBifidobac-terium bifidum. The .alpha.-galactosidase is capable of convertingmellibiose to .alpha.-galactobiose disaccharides which may be incorporatedinto numerous food products or animal feeds for improving gut health bypromoting the growth of bifidobacteria in the gut, andrepressing the growth of the pathogenic microflora.