Casein is a group of milk proteins with high nutritional value, and the exploitation of its techno-functional potentials has been investigated for decades. In this study, acid casein powder was dissolved in 0.1 mol/L phosphate buffers with different pH, resulting in casein solutions with pH 5.9, 6.6 and 7.3. During preparation and storage (40 °C) of the samples, casein hydrolysis was observed in size exclusion chromatography and gel electrophoresis. The degree of hydrolysis increased with increasing pH, and treatment of casein with commercial plasmin resulted in similar polypeptides, suggesting that the hydrolysis was caused by residual indigenous plasmin present in the acid casein powder. Most polypeptides could be cross-linked by microbial transglutaminase, except for one particular fraction which appeared at constant intensity in the chromatograms. The stiffness of acid-induced gels as determined in small amplitude oscillatory shear rheology decreased with increasing degree of hydrolysis, and was also lower for cross-linked samples when the preceding casein hydrolysis was more pronounced. Enzymatic cross-linking increased the resistance of casein against plasmin-related hydrolysis, presumably because of the resulting lysine modification. However, one particular fraction of polypeptides was released by hydrolysis in spite of cross-linking, suggesting that they did not contain lysine residues that are susceptible for mTGase. The results indicate that plasmin-related hydrolysis should be taken into account for the application of acid casein or sodium caseinate as additive in food design.