The dairy industry relies heavily on enzymes for various processes, from milk coagulation to flavor development. Enzyme engineering has revolutionized these applications by creating more efficient, stable, and specific biocatalysts. Key advancements include recombinant production of chymosin replacing traditional calf rennet, development of cold-active and thermostable lactases for lactose-free products, creation of regioselective lipases for targeted flavor development, and modification of proteases for controlled cheese ripening. Modern techniques encompass rational protein design, directed evolution, computational modeling, and innovative immobilization technologies such as cross-linked enzyme aggregates and magnetic nanoparticle carriers. These engineered enzymes deliver significant industrial benefits, including higher yields, consistent product quality, reduced energy consumption, and novel dairy product development. Enzyme engineering also addresses growing consumer demands for clean-label products through improved specificity and reduced side reactions. The continuing evolution of these techniques promises further innovations in sustainability, functionality, and nutritional enhancement in dairy processing across global markets.