Lipoxygenase-free soybean grains are mechanically pulverized into fine particles and then subjected to heat drying treatment with water vapor having a temperature in the range of 130 to 250.degree. C. under atmospheric pressure to form lumps of soybean powder. The lumps are formed into granules having controlled sizes by placing the lumps in a space defined by two plates having a predetermined distance therebetween and having a plurality of parallel grooves formed in the surfaces. The plates are in a state of relative rotation. This method allows the production of soybean powder free from disagreeable odor and taste and the production of soybean milk from the soybean powder, with inexpensive equipment in a quick process.