Biscuits were prepared by incorporating different proportions of defatted soy flour (DSF -0 to 25%) to wheat flour. Liquid dairy by-products viz. Chhana whey and skim milk were used with water in different proportions (100:0; 75:25; 50:50; 25:75 and 0: 100) in the formulation to improve their quality. Results on physical characteristics of soy-biscuits revealed that thickness decreased with the increase in the level of whey and skim milk. Diameter decreased gradually with increasing proportion of DSF in the formulation whereas adding different ratios of water: whey/skim milk blends at different levels of DSF increased the diameter of biscuits gradually. Spread ratio decreased gradually with increasing proportions of DSF in the formulation whereas, adding different ratios of water: whey/skim milk blends at different levels of DSF gradually increased the spread ratio of soy-biscuits from 62.20 to 62.48 and from 62.20 to 62.58 respectively. Hardness of biscuits increased graduaHy from 29.60 to 30.58 Newtons with the increasing level of DSF and whey. An increasing trend in hardness was also observed with the increased levels of DSF and skim milk. But hardness was more pronounced in case of skim milk additions as compared to whey in soy biscuits with increasing level of DSF and dairy by-products.