The effects of dilution of protein content in skim milk (34–8.5% protein content), by lactose addition, on the surface composition, water sorption property and glass transition temperatures of spray-dried powders were investigated. The X-ray photoelectron spectroscopy (XPS) study of spray-dried powders showed preferential migration of proteins toward the surface of the milk particles whereas the lactose remained in the bulk. Sorption studies showed that the lower protein concentration in milk powders is linked to an increased water adsorption property and lowering of water activity ( a w) for lactose crystallization. Analysis of glass transition temperature ( T g) of the powders sorbed at different humidities showed no distinct change in T g values, indicating the dominant effect of lactose on the glass transition temperature of all the powders.