The β-galactosidase enzyme from Bacillus circulans ATCC 31382 BgaD is widely used in the food industry to produce prebiotic galactooligosaccharides (GOS). Recently, the crystal structure of a C-terminally truncated version of the enzyme (BgaD-D) has been elucidated. The roles of active site amino acid residues in β-galactosidase enzyme reaction and product specificity have remained unknown. Based on a structural alignment of the β-galactosidase enzymes BgaD-D from Bacillus circulans and BgaA from Streptococcus pneumoniae, and the complex of BgaA with LacNAc, we identified 8 active site amino acid residues (Arg185, Asp481, Lys487, Tyr511, Trp570, Trp593, Glu601, and Phe616) in BgaD-D. This study reports an investigation of the functional roles of these residues, using site-directed mutagenesis, and a detailed biochemical characterization and product profile analysis of the mutants obtained. The data shows that these residues are involved in binding and positioning of the substrate, and thus determine the BgaD-D activity and product linkage specificity. This study gives detailed insights into structure-function relationships of the B. circulans BgaD-D enzyme, especially regarding GOS product linkage specificity, allowing the rational mutation of β-galactosidase enzymes to produce specific mixtures of GOS structures.