Lactose, a by-product of the dairy industry, was used as a substrate for the production of 5-hydroxymethylfurfural (HMF)- a biofuel and polymer precursor. The combination of bronsted acid (acetic acid) and lewis acid (aluminum chloride) were analyzed in presence of a green solvent- γ-valerolactone for the conversion of lactose to HMF. Three factors (temperature, reaction time and AlCl3.6H2O catalyst concentration) were identified as the experimental factors, and HMF yield as the response parameter. Central composite design with response surface methodology was used to optimize the reaction system. The maximum HMF yield (58.2 mol%) was obtained with a reaction time of 100 min at 135 °C using 0.01% of AlCl3.6H2O. The study showed that the efficiency of the AlCl3.6H2O varied with temperature, while acetic acid played a synergistic role with AlCl3.6H2O in the reaction system. These results were then compared with the industrial whey powder and showed impressive HMF yield of 70%.