Extruded nutritional powders and methods of manufacturing the extruded nutritional powders , including extruded infant nutritional powders and extruded adult nutritional powders are provided. The processes utilize an extruder that is capable of internally mixing and emulsifying protein, and optionally , a carbohydrate with fat and water into an emulsion that can be dried into a powder having equivalent fat separation and dispersibility as compared to spray dried powders.