P-galactosidase, derived from Khyveromyces Iuctis was assayed for activity using lactose, buffered at pH 6.5 with 0.02M potassium phosphate, and reconstituted nonfat dry milk (NFDM) substrates. Variations in buffer strength, potassium ion concentration and water quality were evaluated. Assay under similar conditions using NFDM and buffered lactose resulted in 4.3. and 6.6 units of activity, respectively. Increasing buffer strength to O.lM potassium phosphate resulted in a 20% decrease in lactase activity units. Addition of potassium ions, as OSM KCl, in the enzyme preparation resulted in an increase in observed activity using both assay systems with a greater impact (160% increase) using NFDM vs buffered lactose (120% increase) as the substrate.