A Sulfolobus solfataricus P2 β-galactosidase mutant F441Y was constructed, which has the characteristics of high trans-galactosyl activity and good thermostability. In this study, β-galactosidase mutant F441Y was successfully expressed in Bacillus subtilis and the fermentation process was optimized. After 80 h fermentation in 3 L fermentor, the intracellular enzyme activity reached 76.5 U/mL. Since β-galactosidase is expressed intracellularly, it was immobilized to increase the enzyme usage efficiency and reduce the cost. The immobilization of recombinant β-galactosidase cells was performed using 2% sodium alginate and 1% gelatin as carrier, 2% calcium chloride as curing solution, and 0.5% glutaraldehyde as cross-linking agent. The enzyme activity recovery rate of the cell immobilization reached 62%. Using the immobilized cells for lactose enzyme conversion, the highest conversion of galactooligosaccharides was up to 55.1% after optimizing the conversion conditions.