This study aimed to obtain 15% total solids and reduced mineral content in milk UF permeate by nanofiltration, hydrolysing the lactose content of nano-concentrate enzymically, partially substituting sucrose in ice cream formulations with hydrolysed lactose nano-concentrate (HLNC), and investigating the effects of HLNC on the physio-chemical and sensory characteristics of ice cream. The desired 15% total solids in the nano-concentrate was achieved after three fold concentration of milk UF permeate. The colour of milk permeate changed, pH and mineral content decreased, and crude protein content, lactose content and titratable acidity increased. The lactose content was hydrolysed by enzyme lactase. HLNC was used to replace 25% and 50% of sucrose in ice cream formulations. Springiness, cohesiveness, chewiness, adhesiveness, hardness, iciness, Ph and colour were not significantly affected. Viscosity, freezing point, glass transition temperature, melting temperature, gumminess and sweetness were significantly decreased, whereas freezing time, saltiness and cooked flavour were significantly increased. The overall acceptability of ice cream significantly decreased at 50% but was insignificantly affected at the 25% level. These results indicate that about one quarter of sucrose could be replaced by HLNC. / Master of Science (Hons) (Food Technology)