A method was developed for the production of a hydrolyzed/polymerized whey protein derivative with altered solution and gelation properties using a combination of recombinant DNA and immobilized enzyme technologies. The recombinant fusion proteins trypsin-streptavidin (TrypSA) and streptavidin-transglutaminase (cSAcTG) were produced in Escherichia coli, extracted, and then immobilized by selective adsorption on biotinylated controlled-pore glass. Recirculation through a TrypSA reactor induced limited proteolysis of whey proteins. Hydrolysates were then recirculated through a cSAcTG reactor for incremental periods of time to arrive at increasing degrees of polymerization. The polymers were subsequently analyzed for viscosity/flow behavior, gelation properties, and fracture properties using shear rate ramps/intrinsic viscosity, small-strain oscillatory rheology, and vane viscometry, respectively. By combining limited proteolysis with controlled cross-linking, it was possible to create derivatives of whey proteins with enhanced functional properties. Increases in the degree of whey protein modification were correlated with greater apparent viscosity and intrinsic viscosity, lowered gel point temperatures, and stronger, more brittle gels. This method allowed for recycling of the enzyme, eliminated the requirement for a downstream inactivation step, and permitted control over the extent of modification. Utilization of a similar process may allow for the production of designer proteins engineered with specific functionalities.