Abstract: Objective: A truncated β-galactosidase (BsGal95-D) from Bacillus sp. S3 was biochemically characterized, engineered through rational design, and applied in lacto-N-neotetraose (LNnT) synthesis. Methods: The truncated β-galactosidase gene (BsGal95-D) from Bacillus sp. S3 was cloned and expressed in Escherichia coli BL21 (DE3) cells. After purification via affinity chromatography, the enzyme properties were assessed, and the content of LNnT was determined using high-performance liquid chromatography (HPLC). The site-directed mutagenesis technology was employed for the molecular modification of BsGal95-D. Results: BsGal95-D shared the highest identity (88.89%) with a β-galactosidase from Bacillus circulans ATCC 31382. The specific activity and molecular weight of purified BsGal95-D were 5.62 U/mg and 95 kDa, respectively. The optimal pH and temperature for BsGal95-D were pH6.0 and 60 ℃, respectively. It catalyzed the synthesis of LNnT from lactose and lacto-N-triose II (LNT2) with a yield of 18.4%. BsGal95-D was engineered through rational design, resulting in the mutant T603A/Y606G (mBsGal95-D), which achieved an LNnT yield of 30.1%, 1.64 fold higher than that of wild-type BsGal95-D. The mutant (mBsGal95-D) had a high yield for the synthesis of LNnT. Conclusions: The rational design of the novel β-galactosidase BsGal95-D can provide a theoretical basis for the engineering of β-galactosidases with desired properties. Moreover, mBsGal95-D efficiently synthesizes LNnT using lactose and LNT2, showing great potential for various applications.