The dairy industry is among the most important food industries worldwide. However, the increase in the global dairy industry has led to public environmental problems due to the disposal of whey. A promising approach for the sustainable utilization of whey is converting lactose to valuable lactose derivatives. Epilactose is an interesting bioactive lactose derivative that is enzymatically produced from lactose by cellobiose 2-epimerase (CEase). This review focuses on the health effects and enzymatic production of epilactose. In particular, the enzymatic properties and kinetics, molecular structures, modifications, and practical application of CEases are reviewed. Epilactose is a nondigestible carbohydrate that shows promising prebiotic activity and potentially promotes intestinal mineral absorption, alleviates postgastrectomy osteopenia and anemia, reduces the plasma cholesterol level, and prevents obesity and metabolic disorders. Since 2007, thirty microbial CEases have been identified, and five of their crystal structures have been determined. Most CEases catalyze only the C-2 epimerization of lactose to epilactose, but some hyperthermophilic CEases are bifunctional enzymes that catalyze isomerization and epimerization and produce lactulose as the main product. Food-grade expression of CEases and downstream purification of epilactose have been attempted. However, studies on the molecular modification of CEases for enhanced epilactose productivity remain limited, and enzymatic immobilization and downstream processing should be greatly improved for practical industrialization of epilactose.