Whey, the byproduct of the dairy industries causing environmental pollution has been processed to remove proteins, suspended solids and minerals with chitosan for the isolation of lactose. Chitosan in gel form was more effective in removing these substances from whey than beads. Lactose isolated from whey after treatment with chitosan followed by alcohol precipitation technique was of pharmaceutical grade. Biochemical oxygen demand (BOD) of whey was reduced by 87% after isolation of lactose. (C) 2003 Elsevier Science Ltd. All rights reserved.