Because of the growing trend toward widespread use of protein ingredients in food formulation and fabrication, an understanding of the relationships between the physical properties of proteins and their behavior in food systems is desirable. A range of milk-derived protein preparations, i.e., dry milk, milk proteins, caseins, whey proteins, and lactalbumin, are used in a range of food products for their specific functional attributes. In this paper some of the apparent relationships between the properties of the protein components and specific functional properties are discussed. Thus, the roles of milk proteins in determining some important physical characteristics (i.e. color, bulk density, sinkability, dispersibility) of milk powders and their involvement in a range of functional properties (water holding, solubility, rheological behavior, gelation, film formation, emulsification, and foaming) are reviewed. Because of the various methods and conditions used in determining functional properties and the variability in composition of preparations it is difficult to compare data and/or reconcile differences in published information. The desirability of developing standard methods is emphasized.