The dairy industry is one of the most dynamic sectors of Nepal where production of cheese and its market is in constant growth. As a starter for the production of dairy products, Gram-positive Lactic acid bacteria (LAB) are generally regarded as safe. In addition, some of the LAB can produce β–galactosidase (β–GAL) that are responsible for the breakdown of lactose into its simpler forms and form galacto oligosaccharides (GOS). A large quantity of cheese whey produced as a byproduct from the dairy processing consists of lactose (80-85% dry mass) which can be fermented by the β–GAL into GOS. GOS are prebiotic compounds that enhance the performance and function of gut microflora which could potentially improve human health. The main purpose of this study is to isolate industrially useful lactic acid bacteria producing β-GAL enzymes from milk of various livestock found in varying altitudes in Nepal. The milk samples were collected from various livestock (cow, buffalo and goat) at different altitudes (Bishnupur Katti-80m, Sindhuli-1273m, Khokana-1450m and Chitlang-1750m) in Nepal. LAB present in milk were isolated on selective media (MRS agar for Lactobacillus spp. and M17 agar for Lactococcus spp.). A total of 85 bacteria isolated from samples were identified via morphological and biochemical characterization. Among the isolates, 40 LAB strains were screened for β-GAL production by using X-gal/IPTG assay which showed blue colonies.