Coconut milk is a white liquid made from mixing water with freshly grated coconut, and then pressing the grating mix. The first pressing of the gratings produces what is known as "thick" coconut milk, and the second pressing produces "thin" coconut milk.

It is incorrect to refer to the liquid inside a freshly opened coconut as coconut milk - it is properly known as coconut water, or sometimes as coconut juice.

Coconut milk is found in the cuisine of many Southeast Asian countries, such as Thailand and India. It can also be found in some other countries - it is commonly found in Brazilian cuisine. It is a common ingredient in curry, and also used frequently for desserts and beverages.

Note that if using canned coconut milk in a recipe, most varieties will need to be diluted before being used, as the canned product is thicker than coconut milk. All varieties need dilution if the recipe calls for thin coconut milk. Usually mixing equal parts of the canned milk with water will produce the thick coconut milk. Be warned - if there is oil floating on top in a can, then it is bad, as it has been exposed to too much heat somewhere along the line. However, if there's a semi-solid mass on top, then don't worry - canned coconut milk does have a tendency to separate over time, and simply mixing it back up will make it nice and usable again. (thanks anthropod)

Making Coconut Milk:

Take one fresh coconut. Open it, by whatever method you prefer, and reserve the coconut water inside. Then remove the meat of the coconut from the shell, peel off the brown skin from the meat, and grate finely, with a grater or food processor.

Put the gratings into a cheesecloth, and soak the gratings inside the cheesecloth in 1/2 cup warm water for a few minutes. Remove the cheesecloth from the bowl, and squeeze it out into the bowl. This should yield about 3/4 cup of thick coconut milk.

Repeat, taking the coconut water, and mixing with enough water to make 3 cups of liquid. This will yield about 3 cups of thin coconut milk.

You can also use dessicated coconut, though it's not quite as nice as fresh. Take 8 oz. of coconut, 1 cup boiling water, and put in a blender. Put into cheesecloth, and squeeze out the liquid.

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