An experiment was carried out during kharif and rabi 2010-2011 at the Student's Farm, College of Agriculture, Rajendranagar, Hyderabad on red sandy loam soils to evaluate the best establishment technique of stylo in guava based horti-pastoral system. The experiment laid out in a randomized block design with three replications and the treatment consists of three different scarification treatments viz., overnight soaked seeds, mudball technique seeds and hot water treated seeds (80-85oC for 3-5 min) and bioagents like Trichoderma enriched FYM @ 5 tonnes/ha and Rhizobium application @ 1 Kg/5 Kg seed along with normal dry seed for sole stylo application and their combination consisting of 12 treatments. Among the various treatments line sowing of hot water treated with Trichoderma enriched FYM as intercrop with guava (T11) has significantly recorded highest green forage (9980 kg ha-1) & dry forage (2780 kg ha-1) yield, crude protein per cent (16.2 %) of two cuts, total of crude protein yield (457 kg ha-1) and crude fibre yield (604 kg ha-1) and broadcasting of stylo seed without Rhizobium and Trichoderma enriched FYM treatment as intercrop with guava (T9) recorded the highest average of crude fibre per cent 36.0 %. Highest gross (45864 Rs/ha) and net returns (34294 Rs/ha) obtained by line sowing of hot water treated seeds with Rhizobium application (T10) and highest B: C ratio (3.46) by guava + curryleaf component (T3).