Replacement of fluid losses (dehydration) during sports activities in the heat has been investigated with different beverages. Bovine milk has been recommended for post-exercise rehydration, but its use during exercise may provoke gastrointestinal disorders. This study compared voluntary fluid intake, hydration, and incidence and severity of gastrointestinal (GI) disorders during exercise in the heat under three conditions: no drink (ND), water (W), and skimmed lactose-free milk (SM). Sixteen physically active university students exercised at 32 °C and 70% RH for 90 min at 60–75% HRmax while drinking W or SM ad libitum, or ND assigned at random. A questionnaire explored possible GI disorders. Ad libitum intake was higher (p< 0.05) for water (1206.2 mL) than milk (918.8 mL). Dehydration showed significant differences for SM versus W and ND (W = 0.28% BM; SM = −0.07% BM; ND = 1.38% BM,p< 0.05). Urine volume was significantly higher (p< 0.05) in the W condition (W = 220.4 mL; SM = 81.3 mL; ND = 86.1 mL). Thick saliva, belching, and abdominal pain were higher for SM, but scores were low. Skimmed lactose-free milk is a suitable, effective alternative to be consumed as a hydration beverage during moderate-intensity cycling in the heat for 90 min.