Lactose, the main carbohydrate in milk, is a unique sugar produced in the mammary gland of mammals. Lactose is synthesized in the mammary gland of cows from its precursor glucose. Lactose, being a main determinant of the osmotic pressure of milk, drives the milk yield of cows. The lactose produced in the mammary gland is the main carbohydrate in the newborns’ diet and an important source of energy. Compared to other sugars, lactose has many specific physical and chemical properties, such as its relative low solubility and specific crystallization behavior. In other aspects, it is similar to other reducing sugars, for example, as reactant in the Maillard reaction. These physical and chemical properties of lactose play a major role in the properties and quality of many dairy products and dairy-based ingredients. It is the energy source for the lactic acid bacteria used during fermentation, and its breakdown leads to the formation of specific flavor components in such fermented products. In concentrated and dried dairy products, the concentration of lactose becomes so high that many of the properties of the product are determined by lactose. In addition to playing a role in dairy consumer products, lactose can also be present in, or form the basis of several, dairy-based ingredients. Many dairy-based ingredients are based on whey and therefore rich in lactose. From such streams, it can be isolated for direct use in, for example, animal feed or pharmaceutical applications, and it can also be chemically converted into many lactose-derived components, which have very different functionalities. Lactose, in both dairy products and other food products containing dairy-based ingredients, is important from consumer perspective as well. Finally, at the end of this chapter, a perspective is given on future research needs with regard to lactose in the dairy chain, from primary production to the consumer level.