The effects of hydrodynamic cavitation treatment of raw milk at different temperatures (outlet temperatures of 40, 50, 60 or 72 °C) were evaluated in relation to corresponding reference heat treatments. Physical and functional changes were studied and microbial inactivation was evaluated by the total bacterial count. Hydrodynamic cavitation reduced the mean milk fat globule size to 3.29–1.40 μm, depending on the treatment temperature. Treatment did not result in a significant increase in whey protein denaturation and did not affect acid gel formation. A reduction of >1 log unit in the total bacterial count was obtained, which was primarily ascribed to the temperature increase during treatment. Thus, this study illustrates that HC treatment can provide a heating unit allowing for simultaneous pasteurisation and reduction in MFG size, with minimal changes to the physical and functional properties of the milk.