Milk used in the manufacture of yogurt is often subjected to storage times and temperatures that permit protein degradation catalyzed by bacterial or native proteases. The objective of this research was to evaluate the effects of proteolysis of milk on the physical properties of yogurt. Milk was treated with either crude extracts of bacterial protease or purified plasmin. Treated milk was immediately made into yogurt, which was stored at 7°C and analyzed after 1, 8, and 15 d. Yogurt made from milk pretreated with microbial protease had higher firmness, syneresis, and apparent viscosity than the untreated product. Yogurt made from milk treated with plasmin had significantly lower firmness and apparent viscosity, and after 8 d, lower syneresis as compared with the control. Yogurt made from milk treated with either protease had lower water-holding capacity and protein hydration than untreated controls. Proteolysis of milk did not produce consistent effects on yogurt culture levels, although fermentation was more rapid in the treated milks. Results indicate that proteolysis of milk results in yogurt of substantially different physical properties and that the effects of proteases from psychrotrophic bacteria on the properties of yogurt differ from the effects of plasmin.