The invention provides a method of making a milky coffee drink with a capsule drink machine. The capsule drink machine comprises a base, a brewing chamber, a control panel, a brewing head, an inflow piercing needle, an extraction piercing needle, a liquid supply mechanism and a brewing cup for receiving milky coffee capsules; each milky coffee capsule includes a capsule body and a membrane and also includes a separator for liquid passage, the separator is arranged in the capsule body and divides an inner cavity of the capsule body into a first cavity and a second cavity, milk powder is arranged in the first cavity, and coffee powder is arranged in the second cavity; the method comprises the steps of emulsifying, extracting and mixing; sequentially, the milk powder is emulsified and brewed, the coffee powder is extracted and filtered, and milk and coffee liquids are mixed into a milky coffee drink; in the method, the milk and coffee liquids are mixed well, the milk liquid never floats on the surface of the coffee liquid, the taste of the milky coffee drink is enhanced, and the milky coffee drink has good color and appearance.