Whey powder (WP), a dairy by-product with high biochemical oxygen demand (BOD) and chemical oxygen demand (COD), presents challenges due to its high production, low-value utilization, and environmental pollution. Based on the idea of turning waste into treasure, high-value use of WP was studied. Firstly, an engineered Bacillus subtilis co-expressing β-galactosidase (β-Gal) and L-arabinose isomerase (LAI) was constructed, which ultimately yielded 77.5 g/L D-tagatose from 500 g/L lactose. Subsequently, an engineered Escherichia coli co-expressing glucose isomerase (GI) and D-allulose 3-epimerase (DAE) was used together with above recombinant B. subtilis in a one-pot whole-cell biotransformation, and 29.11 g/L D-tagatose and 11.45 g/L D-allulose were derived from 200 g/L WP (equating to 140 g/L lactose) with yield of 0.29 g rare sugars/g lactose. In addition, the d-glucose, d-fructose and D-galactose in the reaction solution were removed by Saccharomyces cerevisiae S288C fermentation, and finally chromatography was used in separation of D-tagatose and D-allulose to obtain the purified products with 97.5 % and 95.0 % purities, respectively. This study showcases the eco-friendly production of D-tagatose and D-allulose from WP, with their separation and purification via yeast fermentation and chromatography successfully carried out for the first time.