Worldwide aquaculture production is increasing, but with this increase comes quality and safety related problems. Hence, there is an urgent need to develop potent technologies to extend the shelf life of fish. Xanthan gum is commonly used in the food industry because of its high-water solubility, stability of its aqueous solutions in a wide pH range, and high viscosity. One of its modern food applications is its use as a gelling agent in edible coatings building. Therefore, in this study, the effect of xanthan coating containing various concentrations (0, 1, 2%; w/v) of ethanolic extract of propolis (EEP) on physicochemical, microbial, and sensory quality indices in mackerel fillets stored at 2 °C for 20 days was evaluated. The pH, peroxide value, K-value, TVB-N, TBARS, microbiological and sensory characteristics were determined every 5 days over the storage period (20 days). Samples treated with xanthan (XAN) coatings containing 1 and 2% of EEP were shown to have the highest level of physicochemical protection and maximum level of microbial inhibition (p < 0.05) compared to uncoated samples (control) over the storage period. Furthermore, the addition of EEP to XAN was more effective in notably preserving (p < 0.05) the taste and odor of coated samples compared to control.