Mix Dry Ingredients – In a large bowl, whisk together the flour, baking powder, salt, and sugar.
Add Wet Ingredients – Make a well in the center and pour in the warm water, milk, and oil. Stir until a shaggy dough forms.
Knead the Dough – Flour your hands and knead the dough for 3-4 minutes until smooth and elastic.
Rest the Dough – Cover the bowl with a damp towel and let it rest for 30 minutes.
Shape the Fry Bread – Divide the dough into 8 pieces, roll into balls, and flatten into ¼-inch thick discs. Make a small hole in the center of each.
Heat the Oil – In a heavy pot, heat 1-2 inches of oil to 350°F.
Fry to Golden Perfection – Fry each piece for about 2 minutes per side until golden brown.
Drain & Serve – Place fry bread on paper towels to remove excess oil and serve warm with desired toppings.