The objective of this study was to investigate the physicochemical properties of spray dried nanoemulsions having different final water and sugar contents. Formulations consisting of lactose or a 70:30 mixture of lactose: sucrose (23.9%), sodium caseinate (5.1%) and sunflower oil (11.5%) in water were heat treated (100 degrees C, 30 s), homogenized (17 MPa) or microfluidized (100 MPa) and spray dried at two different outlet temperatures (80 or 90 degrees C). Nanoemulsions produced by microfluidization were more stable and less viscous than control emulsions and had lower solvent extractable free fat. Increasing dryer outlet temperature reduced water content, water activity, particle size, tapped bulk density, with a consequent increase of onset temperature of glass transition (T-g) and crystallization (T-cr) of lactose in powders. Reduction of fat globule size by microfluidization lowered T-cr of lactose, an effect attributed to the lower level of protein in the continuous phase. Partial replacement of lactose with sucrose decreased T-g and delayed crystallisation. The study demonstrated that the physical properties of powders can be altered by reducing the fat globule size of emulsions pre spray drying. (C) 2013 Elsevier Ltd. All rights reserved.