Kraft said one company will focus on snack foods such as Oreo cookies and Trident gum.
The other will focus on the grocery business, which includes Kraft cheese and Maxwell House coffee.
The snack business has an estimated revenue of around $32 billion and the grocery business has about $16 billion.
Executives said the split will strengthen both companies.
Aside from the spinoff plans, Kraft also announced that its second-quarter earnings climbed 4 percent to $976 million, or 55 cents per share, from $937 million, or 53 cents per share, a year ago. Revenue rose 13 percent to $13.88 billion from $12.25 billion.
The Associated Press contributed to this report.
