Harvest yellow squash that has been allowed to fully ripen. The skin will be tough and not easily indented with fingernails. This indicates that the seeds are mature and ready for the drying and storing processes.
Cut open the squash to reveal the seeds.
Scrape the seeds into a colander. The seeds are located in the center of the squash, along its length, and will be obvious once the squash is opened.
Wash the seeds. Run water over the seeds while you use your hands to clean away any debris.
Drain excess water from the seeds. Carefully shaking the colander to move the seeds around will expedite this process.
Dry the seeds. Start by pouring the seeds onto a paper towel. Although this removes much of the moisture initially, the seeds will start to stick if left too long and should be moved to a dry plate almost immediately. Spread the seeds out on the plate in a layer one-seed thick. Place the plate in an area that is dry and will stay below 90 degrees Fahrenheit. This may take up to a week. The seeds should be checked daily and stirred to ensure proper drying.
Store the seeds by placing them in paper envelopes and storing in a cool, dry and dark location to keep them from prematurely sprouting or molding.