Milo is added to hot or cold water and/or milk to make a malted chocolate beverage. It does not dissolve readily in cold milk, and so retains the gritty texture of its raw state. Milo can be stirred into steamed milk to make a drink akin to hot chocolate or cocoa. Use of very hot water when making a Milo drink can also alter the taste somewhat as will re-heating a made-up drink which has gone cold.
Milo is sometimes sprinkled on ice cream or breakfast cereals. Milo is often the favoured beverage for the Tim Tam Slam.
Also very popular is the "Magic Milo" which involves adding Milo to a small amount of milk with sugar and whipping it to increase the amount of air in the milk, thereby doubling it in size. Then one adds small amounts of hot water and milk in layers stirring each new layer vigorously to maintain its lightness. A final layer of whipped cream is then topped with extra Milo or chocolate sprinkles. This is more of a 'warm' beverage rather than a 'hot' one and is a more popular version of hot Milo for children.