Galactooligosaccharides (GOS) are synthesized by the enzyme β‐galactosidase during the hydrolysis of lactose. In this so‐called transgalactosylation reaction the galactosyl moiety is transferred to another sugar molecule instead of water resulting in oligosaccharides of different chain lengths and glycosidic linkages. Because their structures are similar to oligosaccharides present in human breast milk, they act as prebiotics, which has been shown for infants and adults to be alike. While so far most of the research to maximize GOS yield has been carried out using buffered lactose solution as a starting material, more and more work is now conducted with dairy by‐products such as whey and whey permeate, or even milk, for direct GOS synthesis in order to develop new GOS‐enriched dairy products. This review aims to summarize the results obtained with various dairy liquids, and it rates their suitabilities to act as raw material for GOS production. Most of the studies using whey or milk have been carried out with enzymes from Aspergillus oryzae, Kluyveromyces lactis, Bacillus circulans, Streptococcus thermophilus, and several Lactobacillus species. As the initial lactose concentration (ILC) is known to be a crucial factor for high GOS yield, most of the research has been done with concentrated or supplemented milk and whey. However, a clear dependency on ILC could only be observed for the A. oryzae lactase, indicating a strong influence of milk components like minerals and proteins on the transfer activities of most enzymes.