This article deals with the analytic and numerical stability of numerical methods for a parabolic partial differential equation with piecewise continuous arguments of alternately retarded and advanced type. First, application of the theory of separation of variables in matrix form and the Fourier method, the necessary and sufficient condition under which the analytic solution is asymptotically stable is derived. Then, the θ‐methods are applied to solve the corresponding initial value problem, the sufficient conditions for the asymptotic stability of numerical methods are obtained. Finally, several numerical examples are presented to support the theoretical results. © 2016 Wiley Periodicals, Inc. Numer Methods Partial Differential Eq 33: 531–545, 2017