The present work deals with the enzymatic production of D-tagatose, a low calorie sugar from whey (containing lactose) by biotransformation of galactose to tagatose using the enzyme arabinose isomerase (AI) from Lactococcus lactis lactis. The growth of Lactococcus lactis lactis was studied and its culture conditions were optimized using response surface methodology (RSM) and artificial neural network (ANN) for enhanced production of arabinose isomerase. It was found that Lactococcus lactis lactis reached maximum growth in 24 hours in presence of 4% NaCl. The intracellular arabinose isomerase was obtained using mortar pestle. It was also evident from the HPLC results that tagatose production increased linearly with increased galactose concentration.