A total of 110 samples of dried dairy products represented as full cream milk powder (50 sachets) were randomly collected from groceries & supermarkets and dried casein (30) and dried whey (30) in sterile polyethylene bags from large factories in Alexandria Governorate. All samples were still valid for consumption as shelf -life is at least to be one year from production time. The collected samples were transmitted to the laboratory for preparation. The samples were examined to determine the levels of fungal contamination and the possible presence of aflatoxin M₁. The obtained data pointed out that 40, 36.67 and 43.33% of the examined samples of milk powder, dried casein and dried whey were contaminated with molds with average counts of 2.2 X10³, 4.2 X 10², and 2.1 X 10² /g, respectively. Aspergillus was the prevalent genus encountered in the examined samples followed by genus Penicillium. 5 out of 14 isolated strains of A. flavus (35.71%) proved to be aflatoxin B₁ (AFB₁) producers with different concentrations. Aflatoxins M₁ could be detected in the examined milk powder, dried casein and dried whey samples, using ELISA, with concentration levels of 0.07-0.6, 0.02-0.06 and 0.03-0.08 µg|kg, respectively. All positive samples were not complied with EgyptianStandards (1990) which stated that milk and milk products should be free from any aflatoxins. So, efforts have to be made to prevent mold growth and aflatoxins production along the entire food chain specially food related to children.