Whey samples collected from Composite Milk Plant, Ludhiana (May, 1980 to July, 1981) had high lactose (2·80-6·11%), protein (0·325-0·485%), fat (0·10-0·25%) and lactic acid (0·14-0·40%) contents resulting in a high Biochemical Oxygen Demand (BOD 5 24·8–59·1 × 10 3 mg litre −1). Propionibacterium shermanii 566 synthesized 5·76 mg vitamin B 12 per litre of whey containing 4% lactose supplemented with 0·5% (NH 4) 2HPO 4, when fermentation was carried out at 30°C under anaerobiosis for the first half (84 h) followed by aerobiosis for the second half of the fermentation (84 h). The metabolite started accumulating at the end of the maximum growth phase (4th day) and lasted until the curve reached a plateau (7th day). Growth of P. shermanii 566 also reduced the BOD of the whey by >90%, thereby decreasing the BOD of the milk plant effluents. The vitamin B 12 enriched fermented whey was found to replace the animal protein factor (APF) as a vitamin B 12 source in poultry rations. Therefore, the technology developed is a worthwhile attempt to utilize whey for vitamin B 12 production and, in turn, reduce the water pollution problem.