Annatto is often used to add color to dairy products such as butter, cheese, or puddings. In India usage of annatto is restricted to butter and cheese, however there are no tailor made formulations available to obtain standardized colour shades for the products. Hence a study was initiated to develop the appropriate annatto dye formulations and level of application in few dairy products (butter, cheese, paneer, biscuit cream, icing cream). Dye extracted from annatto seeds was used for the preparation of water soluble potassium carbonate formulation (nor-bixin, 11.24 %), oil soluble formulation (1.35 % bixin) and an oil/water soluble propylene glycol formulation (PG formulation, 1.31 % bixin). Lovibond tintometer colour units of the commercial butter, cheese and biscuit cream samples were measured for standardizing the colour concentration in the experimental products. The present study evaluates the application and stability of these formulations in butter, cheese, paneer, biscuit cream, icing cream. The products were evaluated for stability of colour and bixin during storage period. The oil/water soluble propylene glycol formulation was found to be tailor-made for all the dairy products studied though the standardized levels varied between 3.75 and 5.0 mg/kg for butter, 3.75 mg/kg for cheese, 5.0-400 mg/kg for biscuit cream, 12.25 and 25 mg/kg for paneer, 5.0-500 mg/kg for icing cream. Increasing concentration in the range of 30-500 mg/kg yielded products with light cream to orange shades, useful for decorating cakes. The average recovery of bixin from the products immediately after processing was 90-98 %. Significant changes (P≤0.05) were noticed in the colour units and recovery of bixin in all the products during storage of 6 months.