Aureobasidium pullulans strain 113B transformed D-tagatose to D-talitol at a faster rate in the presence of glycerol in the reaction mixture. The transformation rates were 93.0, 72.0 and 68.0% respectively when 0.5, 1.0 and 2.0% substrate was used. Cells grown on D-glucose were found to have the most potential for obtaining maximum transformation. In a flash reaction, about 0.58 g D-talitol crystals were recovered from 1 g of D-tagatose after various product purification treatments. Considerable transformation (70.0%) was also observed when substrate was added to the cell cultivation medium. Cells stored at -20 degrees C showed the same transformation activity as intact cells.