The physicochemical properties of tapioca flour, such as its thermal stability, gel texture, and viscosity, can be modified by either incorporating hydrocolloids or dry heat. Given this knowledge, this study examined the impact of xanthan gum, with or without dry heat treatment, on the microstructure and physicochemical properties of tapioca flour. The scanning electron micrographs, amylose content, x-ray diffraction, pasting, and textural and thermal properties were analyzed. The results showed the aggregation of starch granules in native tapioca flour, and it was less in the dry-heated samples. Dry-heated tapioca flour reduces amylose content, improves shear stability, and increases gel hardness. The effect of xanthan gum differed on the pasting properties of the mixtures with and without dry heat. Dry-heated tapioca flour with xanthan gum remarkably reduced setback viscosity, gel hardness, and gelatinization range compared to dry-heated tapioca flour alone (p < 0.05). Xanthan gum acts as a water barrier and delays gelatinization in the flour-gum mixtures; however, this effect diminishes in dry-heated samples containing xanthan gum. This finding suggests that xanthan gum along with dry heat improves the properties of tapioca flour, resulting in high peak viscosity, enhanced shear stability, and reduced retrogradation, making it suitable for use as a food thickener, stabilizer, binder, and texture enhancer.