The current study emphasizes on optimizing a suitable ratio of enzymatically hydrolyzed potato powder (EHPP) and whole milk powder (WMP) to produce a quality yogurt by evaluating the physicochemical and rheological properties. The results showed that the addition of EHPP decreased the pH towards acidic conditions which resulted in the high acidity of yoghurt. The proximate composition showed that EHPP increased the ash, protein, water holding capacity (WHC) while fat, synersis, color parameters and total solid were decreased when compared to control yoghurt (CY) sample. Moreover, texture profile (TPA) analysis showed that the addition of EHPP decreased the hardness and cohesiveness while springiness did not show significant difference. Furthermore, rheological properties revealed that EHPP decreased the storage modulus (G’) and loss modulus (G”) when compared with control. In addition to this, sensory analysis revealed that the treatment P4M (1:3) was found as optimum ratio regarding taste, flavor, and aroma. Besides this, scanning electron microscopy (SEM) confirms that the high amount of EHPP resulted in the void holes while CY showed dense gel structure. The prepared yogurt with EHPP provides an excellent flavor, satisfying sweetness and homogeneous texture. These findings suggest the optimum formulation ratio of prepared yogurt was found to be P4M (1:3) for desirable attributes and consumer acceptance. The prepared yogurt from the EHPP presents the potential industrial applications.