Dairy powders are frequently used in the food industry because of their distinctive nutritional profile and long shelf life. They are popular food ingredients due to their texturizing, emulsifying, and nutritional properties. Nevertheless, each product exhibits distinct attributes that confer unique functionalities to them. The purpose of this study is to comprehend the impact of storage temperature and time on the functionality and stability of dairy powders and their use in labneh production to see how storage conditions of an ingredient affect final product attributes. The study employs four different dairy powders, namely Milk Protein Concentrate (MPC85), Skim Milk Powder (SMP), Whey Protein Concentrate 80 (WPC80), and Whey Protein Concentrate 80 -S (WPC80S). The mentioned powders were subjected to storage conditions of 10 °C, 25 °C, and 37 °C for a duration of 4 months. Prior to subjecting them to any temperature conditions, the analysis on day zero (D0) was performed. On a monthly basis dairy powder properties were assessed using color analysis using the L*, a*, b* system, particle size distribution, Fourier Transform Infrared Spectroscopy (FTIR), water activity, and turbidity analysis. After 4 months, the powders were removed from their storage environments and used in labneh recipes. For each resulted labneh sample, various analytical techniques were employed, including Color analysis, Fourier Transform Infrared Spectroscopy (FTIR), Texture analysis, Rheology measurements, and Sensory evaluations. The findings indicate that alterations in the functionality of dairy powders may greatly impact the quality of the final product.