The functionality of whey dispersions, prepared with a modified whey protein concentrate (mWPC) ingredient, was significantly altered after cross-linking with microbial transglutaminase (TGase) upon pH adjustment to 8. Test TGase-mWPC solutions, pH 8, gelled faster than control mWPC dispersions, as measured in real time; whereas, the gelling temperature of pretreated TGase-mWPC samples (37 °C, 2.5 h) increased from 67.8 to 74.8 °C with a minimal change in gel strength. Prolonged prior incubation with the enzyme (37 °C, 20 h) raised the gel strength in both control mWPC and TGase-mWPC dispersions, though these values were approximately 2.7 times lower in TGase-mWPC samples. Furthermore, the gelling temperature was raised by 9 °C after extensive polymerization. The water holding capacity was not impacted by enzymatic processing while emulsions prepared with TGase-mWPC dispersions proved very stable with no evidence of phase separation during storage at room temperature for 1 mo. Moreover, the apparent viscosity of TGase-mWPC emulsions exhibited a 10-fold increase compared to nonenzyme-treated mWPC samples. The particle size was nearly 11 μm in covalently linked TGase-mWPC test fractions compared with 8 μm in nonpolymerized mWPC dispersions. Ultimately, the functional characteristics of TGase-mWPC ingredients may be designed to deliver superior performance, especially with regard to improving heat and emulsion stability.