Background: Diacetyl provides the buttery aroma in products such as butter and margarine. It can be made via a harsh set of chemical reactions from sugarcane bagasse, however, in dairy products it is normally formed spontaneously from alpha-acetolactate, a compound generated by selected lactic acid bacteria in the starter culture used. Due to its bacteriostatic properties, it is difficult to achieve high levels of diacetyl by fermentation. Here we present a novel strategy for producing diacetyl based on whole-cell catalysis, which bypasses the toxic effects of diacetyl. Results: By expressing a robust alpha-acetolactate synthase (ALS) in a metabolically optimized Lactococcus lactis strain we obtained a whole-cell biocatalyst that efficiently converted pyruvate into alpha-acetolactate. After process optimization, we achieved a titer for alpha-acetolactate of 172 +/- 2 mM. Subsequently we used a two-stage production setup, where pyruvate was produced by an engineered L. lactis strain and subsequently used as the substrate for the biocatalyst. Using this approach, 122 +/- 5 mM and 113 +/- 3 mM alpha-acetolactate could be made from glucose or lactose in dairy waste, respectively. The whole-cell biocatalyst was robust and fully active in crude fermentation broth containing pyruvate. Conclusions: An efficient approach for converting sugar into alpha-acetolactate, via pyruvate, was developed and tested successfully. Due to the anaerobic conditions used for the biotransformation, little diacetyl was generated, and this allowed for efficient biotransformation of pyruvate into alpha-acetolactate, with the highest titers reported to date. The use of a two-step procedure for producing alpha-acetolactate, where non-toxic pyruvate first is formed, and subsequently converted into alpha-acetolactate, also simplified the process optimization. We conclude that whole cell catalysis is suitable for converting lactose in dairy waste into alpha-acetolactate, which favors resource utilization.