The detection of phosphatase activity is used as a legal test to determine whether milk has been adequately pasteurized or whether it has been contaminated with raw milk. Occasional failures of the Milk Regulations phosphatase test were experienced by a processing dairy from stored silo milk. Trials demonstrated that the phosphatase was heat resistant and associated with a pasteurization‐sensitive, psychrotrophic organism isolated from one supply. The standard total viable count at 30°C (TVC) of the supply was satisfactory at 4.59 log cfu/ml; however, the psychrotrophic count at 7°C was much higher at 5.61 log cfu/ml. The test milk after storage produced sufficient heat‐resistant phosphatase activity to give a test failure when the psychrotrophic count reached about 7.09 log cfu/ml or greater. The occurrence of a failure was dependent on the initial numbers of psychrotophic bacteria, the amount of dilution with other milks and the storage time before processing. The psychrotrophic count of the test milk and the count of the phosphatase‐producing isolate were found to increase by approximately one log cfu/ml each day on storage at 4°C. This investigation has shown that a phosphatase failure may indicate the development of microbial phosphatase rather than a process failure. A retest after laboratory pasteurization of any sample failing the test will assist in identifying any microbially produced heat‐resistant phosphatase activity. While a TVC at 30°C will normally be expected to count most types of psychrotrophic organisms, this investigation has shown that on this occasion it did not detect specific psvchrotophic organisms which had contaminat