Lactose is used in many food/pharmaceutical products, despite powders containing amorphous lactose being difficult to handle because they tend to be sticky and are prone to crystallization and powder caking. There is therefore a market for lactose powder with improved functionality to facilitate powder handling. The aim of the proposed project was to produce a value-added, free-flowing and non-caking lactose powder that can be easily blended into other dairy products, such as dry-powder soups or drinks, and non-dairy products such as chocolate bars. The principle of particle coating during spray drying (in-situ coating), which exploits the phenomenon of solute segregation of different components within the drying droplet, was used for the purpose of producing such powders. In this work, spray-dried lactose powders containing low concentrations of edible additives, such as proteins, polymers or fat, were produced in order to investigate the ability of these additives to accumulate at the droplet surface during drying to form a coating that improves powder functional properties and limits powder caking. This thesis presents the results of the trials necessary to develop these coated powder by the use of an