The retention of the protein nutritional value during storage of lactosehydrolysed dried milk at different water activities (aw) was studied and compared with that of ordinary milk. In the lactose-hydrolysed milk biologically available lysine decreased much more rapidly than in the ordinary milk at all the different aw studied. Thus, at conditions normally accepted for ordinary dried milk (aw ~0·2; moisture ~ 4 %) there was an available lysine loss in the hydrolysed milk of about 25 % after 2 months and about 40 % after 6-months storage at room temperature. This occurred without any visible browning. It is concluded that drying to very low aw (≦ 0·11) is necessary to obtain good stability of the protein nutritional value (PNV) in lactose-hydrolysed milk. The drying, however, must be done so that losses in nutritional value are minimal during that process. It should also be noted that fat oxidation might be a problem at such low aw. A chemical method for available lysine assay (guanidination and assay of homoarginine) gave values in good agreement with the biological evaluations with rats.