Spanish muffins are sweet, high-calorie baked products which are highly appreciated for their good taste and soft texture. The aim of this work was to evaluate the suitability of erythritol and of its combination with xanthan gum and double quantities of leavening agent for replacing sucrose in Spanish muffins and to understand their functionality in a muffin system. The linear viscoelastic properties of the batter during heating, its specific gravity and bubbles, muffin weight loss during baking and muffin bubbles, height, volume, and instrumental texture were studied. Both erythritol and sucrose increase in the temperature at which the viscoelastic functions increased with temperature. In comparison with the reduced sucrose muffins, the use of erythritol increased the number of air bubbles in the batter. The height of the muffins also increased in the presence of erythritol when compared to the corresponding reduced sucrose muffins, although the volume did not. Erythritol was not effective in diminishing the increased hardness associated with sucrose reduction, but the combination of erythritol with xanthan gum and a double quantity of leavening agent significantly improved the muffin volume (from 94 cm3 for 100% erythritol formulation to 108 cm3 for 100% erythritol–xanthan double-leavening agent formulation) and significantly decreased the hardness (from 75 N for 100% erythritol formulation to 25 N for 100% erythritol–xanthan double leavening agent formulation).