Lactitol-oligosaccharide (LO) was prepared from lactitol by a transgalactosylation reaction catalyzed by Aspergillus oryzae beta-galactosidase. The utilization of LO by human intestinal bacteria, the digestion of LO by rat jejunum mucosal homogenates and the effects of LO on the intestinal microflora in rats were compared with those of lactitol. 1) LO was utilized in vitro by Bifidobacterium, but lactitol was not utilized. 2) Neither LO nor lactitol were digested by rat jejunum mucosal homogenates. 3) A significant increase in the fecal counts of Bifidobacterium was observed in the LO diets. 4) The concentration of organic acids in feces and cecal contents significantly increased in the LO diets. 5) The concentration of fecal putrefactive products significantly decreased in the LO and lactitol diets. These findings suggest that LO is effective for improving intestinal conditions.