Warm the milk: Pour the milk into the clean Instant Pot insert. Select the Yogurt function and use the appropriate Boil setting if your model has one. Heat the milk to about 190°F (88°C) and verify the temperature with a thermometer.
Cool the milk: Remove the inner pot from the Instant Pot and let the milk cool to about 105–110°F (40–43°C). Stir gently from time to time so the temperature drops evenly.
Mix the starter: Place the yogurt starter in a small bowl. Add a little of the warm milk and whisk until completely smooth.
Add the starter: Pour the starter mixture back into the milk and whisk gently until it is evenly distributed.
Prepare the rennet: Stir the liquid rennet into the cool water. Do not add concentrated rennet directly to the milk.
Add the rennet: Pour the diluted rennet into the milk while whisking gently for about 20–30 seconds.
Incubate: Put the inner pot back into the Instant Pot, close the lid, and select the Yogurt function. Set the incubation period for about 5 hours.
Check the set: At the end of incubation, the mixture should look set rather than liquid, with some whey visible around the edges.
Chill: Cover the pot and refrigerate the yogurt until thoroughly cold. Overnight works particularly well when you want to separate the chilling and straining steps.
Strain: Transfer the chilled yogurt to a yogurt strainer or cheesecloth-lined fine-mesh strainer. Refrigerate while it drains until the skyr reaches the thickness you prefer.
Smooth the skyr: Transfer the strained skyr to a bowl and whisk it gently until creamy. If it is thicker than you like, stir in a small amount of reserved whey.
Sweeten if desired: Add vanilla, honey, maple syrup, or fruit according to how you plan to serve it.
Serve cold: Spoon the finished skyr into bowls and top with berries, granola, nuts, seeds, or a small drizzle of honey.