The invention relates to the field of nutritional ingredients, in particular to methods for producing hypoallergenic galacto-oligosaccharides (GOS) and the use thereof in food and drink items. Provided is the use of a beta-galactosidase (EC 3.2.1.23) derived from Cryptococcus terrestris (recently renamed Papiliotrema terrestris) in the production of a hypoallergenic GOS preparation having a reduced capacity to induce an allergic response in a subject.