First, you need some yogurt with "LIVE CULTURES" to get started. Dannon is the most well-known brand that still contains live cultures, although any plain yogurt with live cultures will do. The culture needs to be less than 5 days old for the microorganisms to be strong enough to be effective.

Note, if the culture is live it doesn't HAVE to be plain yogurt... but if you do use flavored yogurt to start off a batch then that flavor will be passed on in the results.

Once you have begun to make your own yogurt on a regular basis, you can "chain yogurt" by using starter you saved from a previous batch. Usually, you can chain your yogurt up to 4 times. However, the easiest and most economical option is freezing commercial yogurt in ice cube trays. Store these in a bag, and thaw them out for use, one at a time. One ice cube equals about 2 tablespoons, which is the recommended amount of starter for each 1 quart batch of yogurt. Your freshly made yogurt can also be frozen so that you will always have "fresh" starter on hand.    

The second thing you need is THE MILK. Any kind of milk can be used, but I have found that milk with a higher concentration of milk solids will yield a thicker yogurt, which more closely resembles the store-bought variety you are probably used to. To make your milk thicker, just add 1/2 cup of powered milk to a quart of liquid milk.

    Now you are ready to Begin the critical part of the process.

    Heat the milk, by itself, to 180 degrees, or to just under the boiling point. A candy thermometer will provide enough accuracy to get the temperature right. A stainless steel or enamel pan is recommended. This pre-heating kills off any microorganisms in the milk which might compete with the yogurt culture.

    Let the milk cool to about 115 degrees. Whisk about 1/2 cup of this warm milk with the yogurt starter. Then add this mix to the remaining milk. 

Now, let me be plain on this... You let the hot milk cool to 115 degrees and you do not stop the process there.  You do not put the mixture into the refrigerator and start it up the next day.  You use it immediately.  You immediately begin to incubate your mixture.  Got it?

You can use any container, such as a pan, or a bowl.  A quart-sized canning jar makes a great container. and whisk it again. 

Mix well, as any under-mixing may result in a failed batch.

Two, four, six, eight, 
How do we incubate? 

This mixture should be incubated (UNDISTURBED) for a period of at least four hours, and up to 12 hours at a steady temperature of about 115 degrees. 

That undisturbed part needs stressing repeatedly.  That part means to LEAVE IT ALONE.  It's kind of like back in the old days when mothers warned against clomping feet that would make the cake fall.  Leave your yogurt alone.  Don't go stirring it up to see if it is working.

    There are two basic methods of incubation
    (a) insulation, or
    (b) by providing an outside heat source.

    Your Insulation methods include
    (1) putting your mixture into a thermos which has been
    soaking in hot water
    (2) Wrapping jars in a towel and placing in a small cooler
    (3) Wrapping your jars in a heavy quilt.

    The thing to remember in using the insulation-only method is that maintaining a constant temperature of somewhere between 101 and 115 degrees is crucial. Any cooler and it won't work.  Any warmer and it might curl up and die on you.  Consequently the insulation methods are not my first recommendation.

    For an outside heat source, consider putting the yogurt container over the pilot light in your gas oven. A counter top warmed by baking will probably be just right. Another handy spot is a sunny window sill on a warm day.  

WARNING:  The LOW setting on your electric stove oven is too hot.  

What I've found to be just right for our altitude and humidity zone is the back right burner of my electric range when I have the oven set on LOW or WARM.  And like I said, I make a gallon at a time.

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What about using the food dehydrator?  
It says on the box that you can make yogurt there.

Yeah, in little dinky cups, but yogurt lovers like me want to make a gallon at a time, enough to last a day or two, you know?  What I do there is put a stew pot (with no handles on it) that is less than half as wide as the trays and set it on the bottom tray.  Then I take a sheet of aluminum foil and make it fit just inside the tray all the way around and make a tent of it with the top fitting just beneath the bottom of the dehydrator's top, lapping it over the top of the pot to hold it up.  This keeps the warm air circulating instead of evaporating.