In the last few decades, the demand for fruits and vegetables and mixed beverages such as juices and smoothies increased rapidly, which made it one of the highest-growing segments of the food industry. The horse gram is an underutilized crop having desired nutrient and bioactive compounds essential for growth and normal body functioning. In view of the above facts, the present study aimed to develop a milk-based smoothie by incorporating horse gram extract in addition to commonly used ingredients such as sugar, dahi, stabilizer, fruits, and vegetables. In this study, three levels of horse gram extract (HGE- 5, 10, and 15%) were blended with cow milk, and other ingredients (sugar, dahi, pectin, banana, carrot juice extract) were kept constant. The 0% level of HGE was taken as a control to compare the nutritional and functional characteristics of the optimized product. The 10% HGE incorporated product was found best based on sensory and physico-chemical properties. The optimized product was found with 3.03±0.08% fat, 3.38±0.07% protein, 16.17±0.10% carbohydrate, 0.81±0.05% ash, 843.33±3.08 cp viscosity, 3.48±0.05 g/10 g whey syneresis, 12.12±0.67 g/20 g sedimentation, and 31.11 ± 4.17% 2,2-dipenylpicrylhydrazyl inhibition activity. The optimized smoothie had nine days shelf life after packing in polypropylene cups when stored under refrigerated conditions.