Modified gum acacia derived from a plant exudate (Acacia species) was modified by esterification,covered by US Patent 6,455,512 to enhance its emulsifying properties. The functionality of the modified hydrocolloid was evaluated in oil-in-water beverage emulsions and spraydried or encapsulated flavors. Stability tests included centrifugation, particle size distribution,oil retention and sensory methods. Results indicate that the modified gum acacia is superior in performance to the traditional gum , even at lower levels of usage. As a GRAS-approved ingredient, it may be used as emulsifying agent and soluble fiber source for food and beverage applications.