Quarg-type cheese incorporated with encapsulated Terminalia arjuna was stored at 5 ± 1 °C to analyse the storage stability of the product. During the period of storage, the samples were analysed for its physico - chemical properties like moisture, pH, instrumental colour characteristics. As the storage period proceeded an increase in the acidity and reduction in moisture was observed. During the storage period colour L* values decreased and both a* and b* values increased. The antioxidant activity was estimated by % DPPH inhibition activity and during storage period the activity gradually decreased from 95.49 ± 3.46% to 86.13 ± 1.49%. The total phenolic content also decreased as the days of storage increased. The proteolysis analysed by tyrosine value indicated that in optimized sample the proteolysis was rapidly occurring as compared to control sample. At the end of storage period control sample had tyrosine value of 27.40 ± 0.14 whereas optimized sample had a value of 40.30 ± 0.09. An increase in the total viable count and yeast and mold count was observed in the microbial analysis conducted for both control and optimized samples during the storage period. The textural properties were analysed during the storage period which indicated a reduction in hardness in optimized samples. The adhesiveness increased in the optimized samples when compared to control samples. All the analysis carried out indicated positive and negative results in terms of storage stability.