Abstract: Guava (Psidium guajava), called as apple of the tropics, is one of the most common fruits in India. Excellent flavour and nutritive value aid to its great potential for preparation of beverages like squash and ready to serve (RTS). A study was undertaken to produce a stable and organolepticaly preferred guava squash with proper suspension of fruit pulp supplementing the squash soluble dietary fibre with xanthan gum at five different concentrations (0.1 to 0.5%). Bottled guava squash of cv. Allahabad Safeda was prepared with 25% pulp, 40% total soluble solids (TSS), and 1% acidity with different concentration levels of xanthan gum, an exocellular polysaccharide produced by obligatory aerobic microorganism, Xanthomonas campestris. The stability of the products was studied by chemical and sensory evaluation of bottled squash during 180 days of storage. There were little changes in the quality parameters viz., TSS, pH, titratable acidity and ascorbic acid during storage. Non-enzymatic browning in guava squash increased with prolonged storage. Xanthan gum (0.5% W/W) gave stability to the product during 180 days of storage. Overall, acceptability was highest in pure guava squash containing 0.1% of xanthan gum, 40% of TSS and 1% of acidity during the 180 days of storage period.