Lactose assimilation is a relatively rare trait in yeasts, andKluyveromycesyeast species have long served as model organisms for studying lactose metabolism. Meanwhile, the metabolic strategies of most other lactose-assimilating yeasts remain unknown. In this work, we have elucidated the genetic determinants of the superior lactose-growing yeastCandida intermedia. Through genomic and transcriptomic analyses and deletion mutant phenotyping, we identified three interdependent gene clusters responsible for the metabolism of lactose and its hydrolysis product galactose: the conservedLACcluster (LAC12, LAC4) for lactose uptake and hydrolysis, the conservedGALcluster (GAL1, GAL7, GAL10) for galactose catabolism, and a unique “GALLAC”cluster. This novelGALLACcluster, which has evolved through gene duplication and divergence, proved indispensable forC. intermedia’sgrowth on lactose and galactose. The cluster contains the transcriptional activator geneLAC9, second copies ofGAL1andGAL10and theXYL1gene encoding an aldose reductase involved in carbon overflow metabolism. Notably, the regulatory network inC. intermedia, governed by Lac9 and Gal1 from theGALLACcluster, differs significantly from the (ga)lactose regulons inSaccharomyces cerevisiae,Kluyveromyces lactisandCandida albicans. Moreover, although lactose and galactose metabolism are closely linked inC. intermedia, our results also point to important regulatory differences. This study paves the way to a better understanding of lactose and galactose metabolism inC. intermediaand provides new evolutionary insights into yeast metabolic pathways and regulatory networks. In extension, the results will facilitate future development and use ofC. intermediaas a cell-factory for conversion of lactose-rich whey into value-added products.