BACKGROUND Microwave vacuum drying is an innovative technology for drying fruits and vegetables. However, this technology has not been well explored for drying seafood. In the present study, the effects of microwave vacuum drying (MVD), hot air drying (HAD) and sun drying (SD) on the proximate composition, texture, rehydration, color and microstructure of squid shreds were investigated. RESULTS Proximate components of the samples dried by different methods were not significantly different, but the drying time was markedly lower for the MVD technique. The rehydration rate and water absorption index followed the order MVD > HAD > SD. The extent of browning as indicated by the b* value was significantly lower in MVD samples (14.38) compared with HAD (19.47) and SD (21.94) samples. MVD resulted in the lowest values for hardness, springiness and chewiness of both dried and rehydrated squid shreds, while SD recorded the highest values for the same. Scanning electron microscopy (SEM) images of the muscle fiber indicated muscle shrinkage and more toughness in SD samples, whereas Fourier transform infrared (FTIR) spectra revealed a small extent of protein degradation in MVD samples. CONCLUSION The study revealed that higher‐quality dried squid shreds can be prepared by microwave vacuum drying in a shorter time compared with the traditional methods of sun drying and hot air drying. Hence microwave vacuum drying can be used as an energy‐efficient and time‐saving technology to make dried seafood of superior quality. © 2019 Society of Chemical Industry