The polyethylene-thermoplastic (PE/TPS) based film was introduced many years ago, but the compatibility of PE/TPS still an issue because synthetic compatibilizer has a safety drawback. In this work, aloe vera (AV) was introduced as a compatibilizer to enhance stress and characteristics of PE/TPS film. This paper determines the optimum PE/TPS/AV film formulation using full factorial design (FFD) analysis. Melt blending and hot-press techniques were used to prepare the film. Four selected PE/TPS/AV samples were chosen to discuss mechanical properties, functional groups, thermal degradation, and thermal properties changes. Based on FFD, PE was the most significant material that caused substantial changes in the film's mechanical properties. Concurrently, the interaction between PE/TPS and TPS/AV significantly influenced the value of the secant modulus. The addition of AV into TPS improved the stress and reduced the strain. New peaks are present in TPS/AV that share the same functional group with PE. Thus, improving the stress of the film. The presence of AV caused peaks 2916 cm<sup>-1 </sup>and 2849 cm<sup>-1</sup> of TPS to strengthen at once; the thermal degradation increases tremendously from 282 °C to 354.70 °C. The melting temperature showed a reduction when TPS/AV was added into PE, but the crystallization temperature did not significantly change. However, significant changes occurred for crystallization enthalpy when TPS/AV was incorporated in PE at once, affecting the degree of crystallinity. In conclusion, AV was suggested to act as a compatibilizer/crosslinker or plasticizer to improve PE film packaging properties.