Treatment of milk with transglutaminase (TGase) affects its heat stability, but the manner in which it does so depends on whether or not the milk had been preheated before incubation and on the temperature of preheating. In raw milk, it appears that cross-link formation between the individual caseins is responsible for preventing the dissociation of kappa-casein from the micelles at pH values in the region of minimum stability. In milks preheated before incubation with TGase, denaturation of whey protein may have allowed the formation of cross-links by TGase between denatured whey proteins and the individual caseins which, in combination with cross-linking of the caseins, contributed to greatly improved heat stability at pH > 6.5. It appears from the results of this study that TGase has potential commercial applications as a food-grade additive capable of improving the heat stability of milk.