Due to a lack of taste and texture low calorie dairy foods are not appreciated by consumers. Physical, chemical, textural and sensory properties of low-fat set style yogurts using Dairy-Lo® (DL), inulin (IN) and a combination of the two were investigated. During a 14 d storage period they were compared with whole-fat and low-fat yogurts. Whey separation of yogurts varied from 44 to 52% at day 1, and there was no significant change during storage. The low-fat yogurts had the lowest gel strength (p < 0.05), whereas at the end of the storage that of DL-yogurts was slightly higher than that of the other types of yogurts. Sensory properties were positively affected with the use of fat replacers. Use of DL in yogurts gave very promising sensory results. DL-, IN-, DL+IN-yogurts were presented smooth texture and good flavour. Even though the pH values of DL-yogurts declined, excessive sourness was not detected by the panellists at the end of the storage. The use of a blend of inulin and Dairy-Lo would result in an increased consumption of low fat yogurts with protein and fiber content of high nutritional value.