SummaryThis study aimed to use modified rice starch by heat‐moisture treatment with avocado oil (AO) in gluten‐free cakes. Four cake formulations were prepared with native or modified rice starch with AO or soybean oil (control). The cake's sensory, microbiological, technological, nutritional, and bioactive compound characteristics were analysed. All formulations were sensorily acceptable (acceptance index: 72.44% to 79.44%) and microbiologically safe. The cake formulated with modified starch and AO exhibited the best textural properties, softness, and colour, and demonstrated the lowest in vitro digestibility (81.52 ± 2.75%) and glycaemic index (88.04 ± 3.83). AO resulted in higher levels of phenolic compounds in the cake (112.91 ± 1.8 to 237.38 ± 4.1 mg EAG.100 g−1). The use of modified rice starch and AO showed greater potential in the application of gluten‐free cake than those with native starch, resulting in improved product characteristics and good technological and sensory properties. It has also become a promising alternative in gluten‐free food products.