Panose, a major component of isomalto-oligosaccharides, was selectively produced from maltose using transglucosylation reaction catalyzed by intact cells of Aureobasidium pullulans. When 50 %(w/v) maltose was used as a substrate, the maximum concentration of panose accumulated in the final reaction mixture was about 50 %(w/w) after 120 hr reaction at 55 degrees C.