This research aimed to study characterizes effect of hydrolysis of whey protein concentrates (WPCs) using trypsin on their functional properties and use of the modified concentrates in the manufacture of yoghurt. Two types of whey were used, salted whey from Domiati cheese manufacture and ultrafiltrated sweet whey from Ras cheese. Whey protein concentrates were produced by precipitation the salted (SWPC) and UF sweet whey (UFWPC) at 90°C / 20 min., and then freeze dried. The prepared whey protein concentrates were treated with trypsin enzyme at concentrations of 0.15, 0.3 and 0.5 g enzyme per 100 g protein. The results showed that the hydrolysis of whey protein concentrates had insignificant effect on the moisture, fat, ash and lactose, while the total nitrogen content and the degree of degradation significantly increased by increasing the concentration of the enzyme. Water and fat absorption capacities were increased by increasing the enzyme concentration and were higher in UFWPC. Emulsification capacity, foaming properties and the ability to form gel were improved by increasing the concentration of the enzyme. Yoghurt was manufactured using the two types of hydrolyzed whey protein concentrates. The replacement of skim milk powder (SMP) with hydrolyzed WPC increased TS, TN and ash content compared to control. Curd syneresis significantly decreased (p≤0.05) in all treatments compared to control, however treatments with UFWPC exhibited the lowest values. The substitution of 50% and 75 % skim milk powder (SMP) with SWPC and UFWPC in order, had no effect on sensory properties of the yogurt.