This research presents 3D steady-state simulations of a skim milk spray drying process in a counter-current configuration dryer. A two-phase flow involving gas and discrete phase is modeled using the Eulerian−Lagrangian model with two-way coupling between phases. The drying kinetics of skim milk is incorporated using the Reaction Engineering Approach. The model predictions are found to be in accordance with the experimental temperature measurements with a maximum average error of 5%. The validated computational model is employed further to study the effects of nozzle position, initial spray Sauter Mean Diameter (SMD), air inlet temperature, and feed rate on the temperature and moisture profiles, particle impact positions, drying histories, and product recovery at the outlet. The location of the nozzle upwards (≈23 cm) resulted in maximum product recovery and increased the mean particle residence time at the outlet. A similar trend was observed for the highest feed rate of 26 kg/h owing to the increased spray penetration upstream in the chamber. The maximum evaporation zone was detected close to the atomizer (0−10 cm) when the spray SMD is 38 µm, whereas it shifts upstream (40−50 cm) of the dryer for an SMD of 58 µm. The high air inlet temperature resulted in enhanced evaporation rates only in the initial 10−20 cm distance from the atomizer. The results obtained in this study are beneficial for the development of the novel vortex chamber-based reactors with a counter flow mechanism.