First, is it a hybrid variety? If so, the seed won't be true but rather will revert to the characteristics of the original breeds.

Second, were you growing any other kinds of C. pepo summer squash or pumpkin? If so the seed may not be true because the bees might have crossed them.

If the answer to both of the above is no, you'll need to let a squash ripen FULLY -- all the way to the deep, golden-orange, almost pumpkin-like color with a HARD rind like a winter storage squash. It may take until the plant dies down to get it to the right stage.

After that its easy -- cut the squash open, scrape out the seed, wash the stringy goo off (this can take some doing -- getting most of it is OK), and dry the seed thoroughly in a cool, dry, dark place with good air flow.

Squash seed doesn't have to be fermented like tomatoes because it doesn't have the gel-coat on it.

Link below is to a good discussion on your question from over on the Seed Saving forum. It also have lots of FAQ and how-tos posted for many different varieties of vegetables.

Dave

Here is a link that might be useful: How to save squash seeds

Thanks for the info. I believe it was an heirloom variety, dunno if this tells you anything about hybrid or not. And I was only growing the one variety, so I don't think any cross pollination occurred. Thanks!

Squash seed will last for years. I just planted some that were packaged for 2005 and got about 50% germanation, so you can use those for a long time.
One year I planted yellow crookneck, acorn and butternut moderately close to each other and saved some of the crookneck seed. Grew a weird looking squash that resembeled a turban more than any other kind. Lol