Start with non-hybrid seed varieties. In order to begin saving seed from year to year, you probably will need to start by purchasing seed from a company that specializes in "heirloom" seed. Many of these companies have web sites that you can order through online.
Prevent cross-pollination. The simplest way to do this is to only plant one variety of squash in your garden. Planting more than one variety requires that you prevent blossoms from opening, pollinate them yourself, and then close them up again.
Grow squash to maturity. Check the individual variety you are growing to be sure that it is fully ripe before you pick it.
Remove the seeds from the squash. Split the squash open lengthwise and scoop out the seeds. Separate the seeds from the pulp as much as possible, and then rinse the seeds thoroughly in cool water to clean them.
Dry the seeds. Spread the seeds out on newspaper and let them dry at room temperature for several days.
Store the seeds. Protect your seeds from pests, moisture and humidity by placing them in a labeled jar or envelope and storing them in a cool, dry place. Make sure you include the date and variety when labeling your seeds. Squash seeds will retain their germination rate for 4 to 5 years. Storing them in your freezer is a good way to preserve them for a long period of time.
Test the seeds. When you're ready to plant, you may want to test the seed for germination prior to planting. This will tell you how successful you were at saving your seeds. Take about two dozen or so from your storage container. Spread them between wet paper towels, and make sure they stay damp at all times. Check every couple of days for germination. The germination rate of these seeds will give you an idea of how many of your saved seeds you will want to plant.
Plant the seeds. You can plant seeds straight from the container or use the ones that have already germinated. You may now repeat this process year after year.