The Ag@MgO nanoparticles (NPs), consisting of silver NPs with a size range of 6–15 nm well-dispersed on the surface of MgO nanoparticles, were synthesized using a simple and efficient in situ synthesis method. These NPs exhibited superior antibacterial activity compared to bare MgO NPs. Subsequently, they were incorporated into poly(butylene succinate-co-terephthalate) (PBST) matrix to prepare antibacterial food packaging films. The effects of Ag@MgO NPs morphology on the compatibility, mechanical, water vapor barrier, UV blocking and antibacterial properties of PBST matrix were evaluated. Unmodified Ag@MgO NPs caused agglomeration and poor mechanical properties. However, when the Ag@MgO NPs were surface modified and interacted with the PBST matrix, the dispersion of nanoparticles and crystallinity improved, resulting in enhanced tensile strength and barrier properties of the composite films. Furthermore, the well-formed of Ag@MgO NPs in the films played a positive role in controlling the growth of microorganisms. Upon incorporation of the modified Ag@MgO NPs, the PBST nanocomposite films exhibited a 23.5% increase in the tensile strength and a 63% decrease in the water vapor permeability compared to PBST films. Moreover, the UV blocking performances were enhanced, and high antibacterial rates of 99.8% and 99.7% were achieved against E. coli and S. aureus, respectively. All the results indicate that the PBST incorporating modified Ag@MgO NPs have excellent potential for use in food packaging applications.