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Aloe vera gel, well known for its nutraceutical potential, is being explored as a functional ingredient in a wide array of health foods and drinks. Processing of exotic fruits and herbal botanicals into functional beverage is an emerging sector in food industry. The present study was undertaken to develop a spiced functional RTS beverage blend using Aloe gel (AG) and papaya. Aloe gel (30%), papaya pulp (15%), spice extract (5%), and citric acid (0.1%) were mixed in given proportion to prepare the blend with TSS of 15 °Brix. The product was bottled, pasteurized, and stored at room temperature. The quality characteristics and storage stability of the spiced beverage blend (SAGPB) were compared with spiced papaya RTS beverage (SPB). Periodic analysis was carried out up to five months for various physicochemical parameters, sugar profile, bioactive compounds, microbial quality, instrumental color, and sensory acceptability. The SAGPB exhibited superior quality characteristics compared to SPB both in fresh and in stored samples. The SPB was acceptable up to four months and SAGPB for five months. The results indicate that nutraceutical rich AG could be successfully utilized to develop functional fruit beverages with improved quality and shelf life.