3-3/4 c warm water
1 2/3 c instant nonfat dry milk
-- or you can use 4 c milk instead of the water and powdered milk--
2-4 Tbsp store bought, plain yogurt w/live cultures (read label to be sure there are live cultures)
In a large bowl, combine water and powdered milk. Stir very well and let sit for a few minutes. All powdered milk should be dissolved. Heat milk over medium heat until it reaches 180*F. This kills off any bacteria. Remove from heat and stove and allow to cool to 110*F. If the milk is any hotter, it will kill the yogurt cultures. Add the store bought yogurt to the warm milk, stir well until yogurt is dissolved completely. Carefully pour the mixture into a very clean, quart-sized canning jar. Incubate the yogurt in the oven which is set to about 100*F -between warm and 200*F (my electric oven has a warming temp) for 6-8 hours or until set almost as thick as store bought yogurt. Chill and eat.
I buy a big container of plain yogurt, use the 2-4 Tbps and then freeze the rest of the yogurt (I use ice cube trays - 1 Tbsp for each cube). Once they are frozen, I remove and put into a freezer bag and store in the freezer. When I am ready to make some more yogurt, I pull out the cubes and let them thaw while I am heating the milk.