The mechanism of transglutaminase-induced cross-linking of interfacial β-casein layer was investigated in tetradecane/buffer system. Monolayer studies were carried out in a Langmuir trough, where incubation with the enzyme mostly affected the compression of the film through adsorption of transglutaminase to the interface. Interfacial shear rheology was used to follow the kinetics of formation of a visco-elastic film upon cross-linking. Substrate concentration affected the rate of the interfacial cross-linking, when enzyme was dosed per protein concentration. This was most likely due to the saturated substrate layer at the interface in all cases. SDS-PAGE revealed that most of the β-casein at the interface was not cross-linked by intermolecular links, but rather, intramolecular links were formed. Finally, studies of adsorbed β-casein layers on polystyrene beads revealed that cross-linking reduced the thickness of the adsorption layer from 11–12 nm to 8–9 nm. These results suggest that it may be mainly intra-molecular cross-linking which modifies the physical interactions of β-caseins at the interface resulting in a higher layer density and thus, formation of a visco-elastic network.