The potentially negative effects of low molecular weight disaccharides, especially lactose, on spray-drying efficiency and storage stability of dairy powders are often counterbalanced by the presence of intact milk proteins. Hydrolysis of proteins, however, may impair such protective effects and contribute to a loss in production performance. Hydrolysed or non-hydrolysed whey protein/lactose (WP/L) dispersions were spray dried, in order to examine the effects of protein hydrolysis on relaxation behaviour and stickiness of model powders. Whey proteins included a non-hydrolysed, whey protein isolate control and three hydrolysed whey protein powders (WPH), with DH values of 8, 11 and 32, where DH = degree of hydrolysis. Hydrolysis of whey proteins increased moisture sorption in WP/L powders. Moisture sorption was higher in powders containing hydrolysed proteins. Whey proteins delayed the time-dependent onset of lactose crystallization, and this effect was greatest in powders containing WPH32. Glass-rubber transition (T gr) temperatures of WP/L powders were not affected by protein hydrolysis but were dominated by the lactose fraction. Powders containing hydrolysed whey proteins were more susceptible to sticking compared to intact proteins. Surface coverage by proteins or peptides was lower in powders containing hydrolysed WP, and this would have contributed to the greater susceptibility of these powders to sticking. Results suggest that hydrolysis of WP affected the relaxation behaviour of WP/L powders and altered the rate at which lactose underwent viscous flow behaviour.