Lactose-free dairy is able to provide the essential nutrients present in regular dairy products, like calcium and vitamins, to those that are not able to digest lactose. This product category currently has a wide and growing health appeal to consumers. In recent years, the quality and product variety in the lactose-free dairy segment has been increasing significantly, giving consumers more tempting products to decide from. As a result, lactose-free dairy is now the fastest growing market in the dairy industry. This review discusses the market developments and production possibilities and issues related to the wide variation of lactose-free dairy products that are currently available. Additionally, the health benefits that lactose-free dairy may offer compared to dairy avoidance are illustrated.