Step 3 - Add The Starter - Take a cup of the warm milk and add to it the yogurt starter. The yogurt starter can either be 1/2 to 1 cup of store bought plain yogurt (get yogurt that indicates "live active cultures" on the label, or nothing will happen), or the same amount of homemade yogurt from your previous batch. The third option is to purchase some yogurt starter, usually available at health food stores. This can be a little more expensive, but may be more convenient, especially for your first attempt. You can always start using your homemade yogurt as a starter as you start making additional batches. In any event, you blend the starter in with your cup of warm milk, and then add this mixture to the remainder of the warm milk. Note: Some brands of yogurt starter may recommend cooling the milk to a temperature below 112 degrees, so read the label. Otherwise keep the temperature up near the 112 degree level.
Step 4 - Incubate - Just as the word implies, your going to take your yogurt mixture and keep it in a nice warm place, at a constant temperature, for several hours (typically about 4 hours). Whether your yogurt mixture is in one container or several (whichever you find most practical), the container must be kept a constant temperature of around 112 degrees. What is happening during incubation, is the live cultures in your starter are consuming the lactose in the milk, converting it into lactic acid. The amount of lactic acid, hence the tartness of the finished product, depends upon the incubation time. The longer the incubation time, the more tart tasting your yogurt will be.
What do you use as an incubator? Anything that will keep your mixture above 100 degrees for 4 hours or so. If the temperature drops below 100 degrees, fermentation may cease. Your oven is one obvious choice. Your oven will work best if you heat it up above 115 degrees and then let it cool back down to 112 - 115 degrees. If your containers are well-packed and insulated, you could use an ice chest. Another recommendation is to place your yogurt on a heating pad and cover it with a blanket (heating pad, not hot plate!). It's at this step where a yogurt machine may come in handy. They are not expensive, you can probably find one for under $50, and they are of course designed to keep your mixture at the required temperature for however long is needed.
Step 5 - Chill - When the incubating time is up, it's time to take your mixture and place it in the refrigerator, the main compartment, not the freezing compartment. Chilling the mixture will stop the fermenting action, otherwise your yogurt may become to acidic and tart. Your yogurt can keep in the refrigerator for a week to 10 days. You can freeze the yogurt if you wish. The nutritional value won't be harmed, but you can't set aside any of it later to use as a starter for the next time you're in the mood for making yogurt.
Step 6 - Enjoy! - If plain yogurt is all you want, then it's ready to eat as is, use as a dip or in a salad dressing, in a baked potato, or whatever you like to use plain yogurt for. This is also the time to mix in some crushed fruit or fruit slices, if you want raspberry yogurt, peach yogurt, or something like that. One person's idea of a good yogurt dish is to mix in some applesauce. There are loads of good yogurt recipes on line, so you can take the opportunity to try a number of things, and improve your skills at making yogurt at the same time. If you do opt for a yogurt machine, the chances are pretty go that you'll find some recipes in the box along with the machine. How about yogurt cheesecake?
Don't Let The Green Stuff Bother You - There is of course no iron clad guarantee that everything will work right the first time, although it really should. If something goes wrong, it usually relates to the temperature not being correct at some stage. For example, if you put your yogurt starter into hot milk rather than warm milk, you'll kill the starter. And if you let the temperature drop below 100 before putting your mixture into the incubator, fermentation will not take place. The end result in either case is you'll have a container full of milk. Sometimes, a batch of new yogurt will have liquid on the top. It may be clear, yellowish, or even greenish. Nothing is wrong, just stir it back in. What sometimes happens is the whey separates from the curds and rises to the top. Neither the quality nor the taste of the yogurt is affected. It just doesn't look like you'd expect.
So, with thermometer in hand, a quart of milk, some starter, and some idea of what you'll use for an incubator, you're set to go. Try a couple of recipes along the way, and you'll no doubt be happy you decided on making yogurt at home.