Fifteen yeast strains belonging to different genera and species were screened for their ability to utilize lactose as a sole-carbon source. NRRL Y-1205 and Kluyveromyces fragilis CAIM-29 were capable to produce beta-galactosidase. The highest level of enzyme production [10.5 units-ml] was detected in Candida pseudotropicalis. Three treatments of extraction were used to release the enzyme from yeast cells [solvent extraction-freezing and thawing and ultrasonic treatment] . Solvent treatment with benzene at concentration 1: 5 [w-w] cells to solvent was the most favorable solvent for beta-galactosidase release