Casein and whey protein were hydrolyzed using 11 different commercially available enzyme preparations. Emulsion-forming ability and emulsion stability of the digests were measured as well as biochemical properties with the objective to study the relations between hydrolysate characteristics and emulsion properties. All whey protein hydrolysates formed emulsions with bimodal droplet size distributions, signifying poor emulsion-forming ability. Emulsion-forming ability of some casein hydrolysates was comparable to that of intact casein. Emulsion instability was caused by creaming and coalescence. Creaming occurred mainly in whey hydrolysate emulsions and in casein hydrolysate emulsions containing large emulsion droplets. Coalescence was dominant in casein emulsions with a broad particle size distribution. Emulsion instability due to coalescence was related to apparent molecular weight distribution of hydrolysates; a relative high amount of peptides larger than 2 kDa positively influences emulsion stability.