Paprika oleoresin was co-crystallized to formulate a natural and hydrophilic dye for use in food applications. The color stabilities of the co-crystallized and free oleoresins were evaluated at different temperatures (25 and 35 °C, 70% RH) and light exposures (light 70 watts and dark, 25 °C, 70% RH). Co-crystallization from supersaturated sucrose syrup (S = 1.32) was found to be optimum for the formation of sugar agglomerates in a few minutes, with the paprika oleoresin entrapped inside. With time, decreases in the values of the a* parameter and the β-carotene content were observed with increasing temperature and with the incidence of light. The color degradation kinetics were dependent on both factors. The loss of color was greater for the free oleoresin as compared to the co-crystallized, suggesting that the co-crystallization process improves oleoresin retention in the sugar matrix, making it less susceptible to losses due to color degradation.Practical Applications: Co-crystallization process was used to encapsulate paprika oleoresin in sucrose matrix having natural color as the main technological feature of the product and developing an ingredient with good properties for application in sugar products. This approach created an ingredient with a hydrophobic compound incorporated in a hydrophilic matrix. Ot is an alternative process to handle and entrap a range of ingredients, aiming to improve the stability of the encapsulated material. β-carotene had good storage stability and degradation kinetics provided information to determine best storage conditions.