Virgin coconut oil (VCO) wet processing produces large amounts of coconut residue (CR), a perishable by-product with potential for valorization into value-added food ingredients, such as dietary fiber. Proper pretreatment is necessary to ensure the quality and safety of CR for further utilization. This study evaluated the effect of pan-roasting and hot-air drying on the microbiological safety and physicochemical properties of CR. Six (6) treatment groups for CR were prepared: control (no treatment), pan-roasting at 65–70 °C for 10 min (PR), hot-air drying at 50 °C (D50) and 60 °C (D60) up to a 10% moisture content, and combined pan-roasting and hot-air drying treatments (PR-D50 and PR-D60). The microbial (i.e., aerobic plate, yeast and mold, and total coliform counts) and physicochemical quality (i.e., titratable acidity or TA, pH, and instrumental color) of the samples was analyzed. Only the microbial counts of the PR and PR-D60 samples met the acceptable microbial limits. These samples, along with PR-D50, generally showed low TA and high pH values, suggesting reduced production of spoilage acids from microbial degradation. However, pan-roasting may have resulted in a slight color change in the CR, as indicated by low L* values. Our findings suggest that pan-roasting is a promising pretreatment step to ensure the microbiological safety and physicochemical quality of CR. Further validation using CR collected from a VCO processing facility will be undertaken to confirm these results.