The aim of this study was to evaluate and optimize incorporation of alcohol insoluble residue from potato processing by-product (AIR-PPB) in wheat flour bread at different particle sizes by using response surface methodology (RSM). Results showed an improvement in the functional properties of the AIR-PPB in terms of water holding capacity (WHC), swelling capacity (SC) and water solubility index (WSI) as particle size increased. As portion of AIR-PPB and particle size increased, total dietary fiber content, water absorption (WA), dough development time (DDT) increased. Higher particle size giving more stability to the dough structure but had inverse effect on dough weakening (DW). Breads with lower specific volumes, higher hardness were associated with increment in AIR-PPB incorporation level at higher particle size. All the sensory attributes of experimental and control breads were acceptable.