Manufacturing low fat and heat resistant chocolate is a major challenge faced by the chocolate confectionery industry. A hybrid hydrogel was prepared from food hydrocolloids by combining both physical and chemical cross linking methods. The hydrogel was then dispersed in the chocolate at different concentrations (0, 25, 50, 75 and 100% (v/v)) further subject to structural, crystal polymorph, thermal and rheological analyses. Among the different hydrogel concentration dispersed chocolates the 50% (v/v) hydrogel dispersed chocolate exhibited a glossy appearance, less surface roughness, required form V (beta polymorph) cocoa butter polymorphism, highest melting resistance (80 degrees C) and non-Newtonian behaviour which was elucidated by Casson model. This study fosters a novel technology to produce low fat and heat resistant chocolate.