Preheat the oven to 350°F and grease a 5-cup baking dish.
In a medium-size bowl, combine the sugar and butter until sandy. Stir in the egg yolks followed by the flour. Finally, whisk in lemon zest, juice, and milk.
In a separate bowl, beat the egg whites until stiff peaks form. Gently fold the egg whites into the batter. Pour the mixture into the prepared baking dish.
Bake for 40 minutes, or until the pudding is set and the top is golden. Serve warm with dusted powdered sugar and whipped cream on the side.