Fair Eva, the other Frankel offspring, was sent off a prohibitively-priced favourite at 4-11 to retain her unbeaten record, and while she was not disgraced she was only third after holding every chance.
Queen Kindly upheld family honour as she was emulating her dam Lady Of The Desert in 2009 and grand-dam Queen's Logic in 2001, who also carried the same colours of owner Jaber Abdullah.
Irish raider Roly Poly made the running and although Fair Eva was well positioned in the centre of the course, the 9-2 winner was stuck in a pocket.
Jamie Spencer had to ask Queen Kindly to be brave and go through horses which she did in a highly professional manner to seal the contest from Roly Poly by three-quarters of a length. Fair Eva was the same distance away in third.
Before this race, Queen Kindly had won two minor events at Catterick with defeat in the Albany Stakes at Royal Ascot sandwiched in between.
Trainer Richard Fahey did not hold back his disappointment that day and his faith in her was justified in a vintage renewal of this Group Two heat.
"It was easy on the eye to watch there," he said.
"It just looked a bit tight about a furlong and a half out, but once the gap opened I knew she'd pick up.
"I kept an eye on the other filly (Fair Eva), but half a furlong out I thought it was ours.
"The favourite was visually impressive at Ascot (last month), so you had to be very worried about her. The bookies were saying she was 2-5 so we were coming here to finish second."
He went on: "From day one she has been very easy to train - a strong filly, great mind, doing everything right and showing lots of speed.
"The fact that there is a bit of attention with Frankels, I didn't want to be the first to run one, so I waited until one had run.
"She could have run in the Brocklesby (at Doncaster in March), but we haven't rushed her. She's always had talent and she's shown that now and she takes after the mother more than her father."
Spencer said: "She's a gorgeous filly and Richard fancied her. He said 'don't worry about the other Frankel (filly, Fair Eva), we know what we've got."
Queen Kindly was slashed to 8-1 from 20-1 for the Qipco 1000 Guineas with RaceBets and Boylesports, while Coral halved her price to 10-1.
However, at this stage Fahey is not sure if she will stay the mile.
"I've got to speak to the whole team," said the North Yorkshire handler.
"The Cheveley Park is the obvious plan. I'd just be a bit worried she might not be a Guineas filly. We'll have to see."
Fair Eva is still high in the ante-post market for the Guineas at around 6-1 despite suffering her first defeat.
Her trainer Roger Charlton said: "I've got no excuses. Pat (Smullen) said she ran flat.
"She was never going that well at any stage, she got a bit warm beforehand but nothing too bad.
"They've run a quick time and were five lengths clear, but we don't have an answer.
"We'll reassess before making any plans."
Connections of the runner-up were happy with the display as Aidan O'Brien's Roly Poly had a 3lb penalty.
Coolmore representative Kevin Buckley said: "We're very pleased with her, she got the ground she likes again.
"We have to be happy as we were conceding 3lb to the winner.
"Seamus (Heffernan) was very complimentary, it looks like she's been beaten by a good one.
"I don't know the plans but we'll be searching for that ground again."
G1 - The Bet365 Celebration Steeple Chase (class 1)
G3 - The Bet365 Gold Cup Steeple Chase (handicap) (class 1)
G1 - Aes Champion 4yo Hdle
Grade B - Setanta Sport H'cap Hdle
Grade B - Palmerstown House Pat Taaffe H'cap Chase