Prep your air fryer: Lightly coat the basket with cooking spray (canola oil is best, not olive oil) or brush with melted butter. Alternatively, line the basket with air fryer liners for easy cleanup.
Make the dough: In a medium bowl, combine flour and frozen grated butter. Use a pastry cutter or fork to cut the butter into the flour until it resembles coarse meal with pea-sized butter pieces.
Form the dough: Slowly add milk, one tablespoon at a time, and mix with a fork until a shaggy dough forms. Stop adding milk once the dough comes together and pulls away from the sides of the bowl. Don't overmix!
Shape and bake: Scoop a heaping tablespoon of dough and gently form it into a ball. Place the dough ball in the prepared air fryer basket, leaving space between each biscuit for them to rise. Repeat with the remaining dough, making about 5-6 biscuits depending on their size.
Air fry: Set your air fryer to 325°F (162°C) and bake the biscuits for 10-12 minutes, or until golden brown. Start checking for doneness at the 10-minute mark.
Serve and enjoy! Carefully remove the basket from the air fryer and let the biscuits cool slightly before transferring them to a plate. Serve warm with your favorite toppings like butter, jam, or gravy.