In a pot over medium heat, heat the milk and powdered milk, stirring constantly, until a thermometer reads 185°F (85°C). Remove from the heat.
Submerge the bottom of the pot in an ice bath and let the milk mixture cool to 110°F (45°C). Remove the pot from the water.
In a small bowl, combine ½ cup (125 ml) of the mixture with the yogurt starter. Pour into the remaining milk mixture still in the pot and strain into a yogurt maker (see note). Close the machine and let ferment at room temperature for 5 hours.
Place a fine sieve lined with a few layers of paper towel over a large bowl. Pour the yogurt into the sieve. Cover with plastic wrap and let strain for 4 hours in the refrigerator or until completely chilled. Discard any liquid. Transfer the yogurt to an airtight container.
The homemade Greek yogurt will keep for 2 weeks in the refrigerator.
For a richer, creamier result, you can replace 1 cup (250 ml) of 3.25% milk with the same quantity of 35% cream. If you don’t have a yogurt maker, at step 3, transfer the yogurt mixture into an 8-cup (2 litre) glass container. Set the glass container in a larger baking dish filled halfway with hot water. Place the container in the middle of the oven without turning on the heat. Turn on the oven light and let sit until the yogurt is set, about 5 hours. Continue with steps 4 and 5.