The earliest evidence for cheese production in the Mediterranean is revealed by stable carbon isotope analyses of individual fatty acids in pottery residues from the Dalmatian coast of Croatia. Lipid residue data indicate the presence of milk in the earliest pottery, Impressed Ware, by 5700 cal. BCE (7700 BP). In contrast, by 5200 cal BCE (7200 BP), milk was common in refined Figulina pottery, meat was mostly associated with Danilo ware, cheese occurred in Rhyta, and sieves contained fermented dairy, representing strong links between specific function and stylistically distinctive pottery vessels. Genetic data indicate the prevalence of lactose intolerance among early farming populations. However, young children are lactase persistent until after weaning and could consume milk as a relatively pathogen-free and nutrient rich food source, enhancing their chances of survival into adulthood. Fermentation of milk into yogurt and cheese decreases lactose content. The evidence for fermented dairy products by 5200 cal BCE indicates a larger proportion of the population was able to consume dairy products and benefit from their significant nutritional advantages. We suggest that milk and cheese production among Europe's early farmers reduced infant mortality and helped stimulate demographic shifts that propelled farming communities to expand to northern latitudes.