The growing interest in functional foods with special characteristics and health properties has led to the development of new functional beverage. Beverage based on fruits and milk products are currently receiving considerable attention. The apple contains functional nutrients such as phenolic compounds and organic acids. Milk, the best source of nutrition, provides enormous health benefits. The present study was undertaken to develop valuable functional beverage. The analysis of functional beverage was carried out for total phenolic contents, ascorbic acid, pH, acidity, total soluble solids and sensory evaluation during storage at 4oC. An increase in total phenolic contents was observed from 7.575 at zero days to 9.045 at end of storage period. The storage decreased the ascorbic acid from 3.264 to 2.203 mg/100 mL throughout the storage period. The fall in pH was observed along with an increase in acidity. The mean values were found in the range of 6.73 to 6.96 in the start and 5.44 to 5.61 at the end of storage period. The mean value for acidity was 0.019 to 0.058 % at zero days and 0.288 to 0.299 % at the end of storage period. The increase in TSS was also observed during storage time. The value ranged from 11.20 to 11.73% at initiation of experiment and 11.93 to 12.13% at the end of storage period. Sensory evaluation revealed that product is acceptable for 28 days and treatments T2 (10% apple pulp) and T3 (12% apple pulp) gained maximum scores during sensory evaluation. These analysis presented that dairy based apple drink can be preserved for 28 days at 4oC.