The effect of different degrees of pre-crystallised lactose (PCL) (0–45%) on the physico-chemical properties of infant formula (IF) containing hydrolysed whey protein was investigated during ageing at two temperatures (25 and 45 °C) and three levels of relative humidity (RH; 11%, 33%, 54%). An increase in the proportion of PCL resulted in higher particle size and higher surface free fat immediately after drying. Lactose crystallisation at RH 54% at both storage temperatures exhibited a logarithmic decline in Tg in IF containing 18% PCL as opposed to exponential decline in IF containing >18% PCL. The degree of PCL directly affected the changes in surface free fat and IF containing 18% PCL and resulted in lowest surface free fat at all ageing conditions. Overall, the proportion of PCL in IF strongly influenced the changes in their physicochemical properties after drying and during storage.