Lactose strongly affects the stability of dairy products on drying and storage. In skim milk powder, WPC35 and infant formula, lactose represents >50% of dry matter and forms an amorphous matrix in which other constituents are dispersed. When temperature and water activity exceed critical values, the amorphous lactose matrix changes to a rubber-like state, where the powder can become sticky. Lactose crystallization and Maillard reactions can also occur as self-propagating reactions due to water release from amorphous lactose on crystallization and the reaction between the carbonyl and the amino group, thus further increasing water activity. Hence strict control of heat-load and drying conditions and prevention of moisture gradients (e.g., in dry-blending ingredients) are needed to maintain powder properties. Otherwise, lumping, caking and other handling properties can occur. Moisture sorption isotherms and glass transition temperatures can be predicted based on composition and can be used as input parameters for optimization of processing conditions. For powders with even higher lactose content, e.g., permeate or whey powder, pre-crystallization of lactose in the concentrate before drying is required to avoid development of excessive stickiness during drying. Pre-crystallization is achieved by (flash) cooling and addition of seeding crystals. Optimization of pre-crystallization conditions (temperature and solids content) in relation to crystallization rate and viscosity is needed to attain sufficient crystallization within an acceptable time. Typically, up to 75% of lactose can be crystallized by pre-crystallization. Post-crystallization after drying can further increase crystallization levels, up to 95%. Failure to attain sufficiently lactose crystallization (i.e., >75%) can lead to caking, lumping and browning when powders are stored. Other constituents also influence the behavior of lactose during processing and storage. Lactose-phosphate, formed during fermentation, is a potent inhibitor of lactose crystallization, whereas lactate salts present can add considerable hygroscopicity to powders. Overall, careful control of composition, processing and storage conditions is paramount to attain and maintain high-lactose powders of desirable properties.