The club, which has three courts in its facility off Union St, was named best club by Squash New Zealand last month.
It had previously won the award in 2006 and was also named as the top sports club by the University of Otago earlier this year.
The club has more than 300 members, and men's club captain Andrew Haines said it was great to win the award.
The club was the biggest in Dunedin, and had a strong committee, which had upgraded facilities, and was looking at heating the courts next year.
The club had about 30 teams in inter-club grades in Dunedin, and won both the men's and women's first division grades.
Haines said although the club was open to any member of the public, the majority of players were students.
Many players took up the sport when at university and open days during Orientation had proved very successful.
It was the ideal sport for students, as they could play any time of the day or night and it did not take a lot of time out of a day.
He said some students had been known to have played in the later hours to freshen up after study, as membership allowed 24-hour access to the courts.
The club also hosted the F Grade national championships in September, and an online court-booking system also worked well with the student population.
Haines said coaching programmes were set up and record-keeping was also being improved.
As well as winning the club of the year trophy, the club received a $2000 grant from the Lion Foundation.