Transglutaminase (TGase) is an enzyme that cross-links many proteins, including milk proteins. In this study, the effects of TGase on some physico-chemical properties of milk were studied. TGase-treated milk was not coagulable by rennet, which was due to failure of the primary (enzymic) stage of rennet action rather than the non-enzymic secondary phase. Dissociation of TGase-treated casein micelles by urea or sodium citrate or removal of colloidal calcium phosphate by acidification and dialysis was reduced, presumably due to the formation of cross-links between the caseins. Casein micelles in TGase-treated milks were also resistant to high pressure treatment and to hydrolysis by plasmin. Results of the present study show that milk proteins are fundamentally modified by the action of TGase, which may have applications in the manufacture of functional proteins for use as novel food ingredients.