In this study, Cudrania tricuspidata (CT) containing abundant phytochemicals, such as xanthones and flavonoids, was evaluated as an additive to fortify the functionality and organoleptic quality of fermented milk. The physicochemical, functional, and sensory properties of fermented milk supplemented with different concentrations of CT powder were investigated. Increasing amounts of CT powder elevated the malic acid concentration, increasing the total acidity and decreasing the pH of fermented milk supplemented with CT powder. The viable cell count and free sugar contents of fermented milk indicated that supplementing with CT powder improved lactic acid fermentation slightly. The color of fermented milk supplemented with CT powder was darker, redder, yellower, and more pleasing than the control fermented milk. The total phenolic and flavonoid contents of fermented milk supplemented with CT powder rose as the concentration of supplemented CT powder increased, resulting in enhanced antioxidant and antimutagenic activities. The CT powder improved the functionality of the fermented milk; still, at 2% or more, it had some unfavorable sensory properties, such as sourness, taste, and texture, which reduced the overall consumer preference. Therefore, a CT powder concentration of 0.5% or 1% may be acceptable to consumers.