Lactulose, a semisynthetic nondigestive disaccharide with versatile applications in the food and pharmaceutical industries, has received increasing interest due to its significant health-promoting effects. Currently, industrial lactulose production is exclusively carried out by chemical isomerization of lactose via the Lobry de Bruyn-Alberda van Ekenstein (LA) rearrangement, and much work has been directed toward improving the conversion efficiency in terms of lactulose yield and purity by using new chemo-catalysts and integrated catalytic-purification systems. Lactulose can also be produced by an enzymatic route offering a potentially greener alternative to chemo-catalysis with fewer side products. Compared to the controlled trans-galactosylation by β-galactosidase, directed isomerization of lactose with high isomerization efficiency catalyzed by the most efficient lactulose-producing enzyme, cellobiose 2-epimerase (CE), has gained much attention in recent decades. To further facilitate the industrial translation of CE-based lactulose biotransformation, numerous studies have been reported on improving biocatalytic performance through enzyme mediated molecular modification. This review summarizes recent developments in the chemical and enzymatic production of lactulose. Related catalytic mechanisms are also highlighted and described in detail. Emerging techniques that aimed at advancing lactulose production, such as the boronate affinity-based technique and molecular biological techniques, are reviewed. Finally, perspectives on challenges and opportunities in lactulose production and purification are also discussed.