In this study, β-galactosidase has been immobilized on tannic acid stabilized silver nanoparticles (AgNPs). Tannic acid is a phytochemical and it is advantageous to use it as a linker molecule for immobilization because of its antidiarrheal and antimicrobial properties, and very low toxicity. AgNPs with immobilized β-galactosidase were characterized for particle size and catalytic properties. The AgNPs consisted of almost monodispersed particles of average diameter of ∼20 nm. β-galactosidase immobilized on tannic acid stabilized AgNPs (83.6% Immobilization yield) exhibited good activity with a high enzyme to carrier ratio as compared to the previous reports. Immobilization did not affect the optimum pH (pH 4.5) of the enzyme, however it retained greater fraction of activity in both alkaline and acidic pH range. The immobilized enzyme exhibited greater fraction of activity at higher temperatures as compared to the soluble enzyme, and its optimum temperature increased by 5 °C. The immobilized enzyme retained almost 60% of its activity after 10th successive use. The immobilized enzyme hydrolyzed 258 and 474 μM lactose from 1% lactose and from milk lactose, respectively, whereas the soluble enzyme hydrolyzed 235 and 424 μM lactose from 1% lactose and from milk lactose, respectively. Excellent activity and stability of β-galactosidase immobilized on AgNPs provides a cost-effective industrial application of this enzyme. β-galactosidase immobilized on tannic acid stabilized AgNPs are free from toxicity hazards of the linker molecules. Hence, it may find constructive enzyme based applications in food technology.