Food product waste streams are increasingly important resources to produce carbohydrates, lipids, and proteins. With the global population expected to reach over 9 billion by 2050, there is a growing need to develop sustainable solutions to produce these essential compounds. Agricultural waste streams can be very valuable and is an important area for exploration for future research. Co-product streams are often sources of carbohydrates, proteins and lipids that could be extracted and valorized into valuable ingredients. The valorization of whey protein into a high-value-added ingredient underscores the market potential for co-products of cheese production. After purification of whey protein concentrate, whey permeate remains with a high lactose content and cannot be directly released into wastewater. In recent years, consumers and producers alike have increasingly demanded a reduction of added sugars in processed foods and beverages. Rare sugars are monosaccharides with near-equivalent sweetness intensity as sucrose, but a fraction of the caloric density and minimal adverse health impacts. Present in very small amounts in nature, an opportunity remains to produce rare sugars from ‘waste’ sugars such as lactose. Tagatose and allulose, are of particular interest as they have been granted Generally Recognized as Safe (GRAS) status by the U.S. Food & Drug Administration. While enzymatic conversion of lactose to rare sugars is possible, challenges remain in designing a system that preserves enzyme activity and stability over multiple cycles of reuse. The long-range goal of this dissertation was to immobilize a series of enzymes onto cellulosic supports to convert the lactose in the whey permeate into a rare sugar syrup. The first part of the dissertation investigated the properties of sugars as additives in solution to improve enzyme’s thermostability. It was found that the addition of trehalose in solution improved the enzyme’s thermostability by over 50% at temperatures up to 60˚C. Then, enzyme immobilization was studied by genetically modifying a wild-type enzyme with the addition of a cellulose-binding module, allowing the enzyme to self-immobilize onto cellulose in under 15 minutes. Additional work in enzyme immobilization, specifically with D-psicose-3-epimerase will provide data to potentially create a continuous batch process with a series of enzymes to convert lactose into tagatose and allulose. By utilizing current and emerging technologies, the potential of these resources can be fully realized and contribute to a more sustainable food production system all around the world.