Dairy beverages were produced from milk protein and fortified with linseed oil, which is rich in omega-3 fatty acids. Polyphenol extract was obtained from passion fruit seeds (PFSE) and added to beverages to prevent lipid oxidation. Three passion fruit polyphenol concentrations (0, 0.1 and 1.0 g/kg) were tested and two thermal treatments (pasteurization and sterilization) were applied to dairy beverages. Emulsion stability was measured and lipid oxidation was determined during storage and during simulated digestion. Production of conjugated dienes and aldehydes (propanal and 4-hydroxyhexanal) during storage was significantly reduced in the presence of PFSE and sterilization treatment further increased the resistance to oxidation. During simulated digestion, pasteurized beverages were prone to oxidation, and the addition of PFSE (1.0 g/kg) reduced the formation of propanal and 4-hydroxyhexanal by 85% and 88% respectively. In the absence of PFSE, sterilization treatment reduced aldehyde production during digestion of dairy beverages by more than 70%, which was attributed to the formation of Maillard reaction products. For sterilized beverages, adding PFSE to the formulation only had limited impact on aldehyde formation. These results showed the potential of PFSE and heat treatments to enhance the oxidation stability of beverages containing omega-3 fatty acids.