Ethylene-induced quality deterioration of postharvest fruits aggravates food wastage worldwide, therefore, the development of effective approaches for reducing ethylene concentration of packaged fruits is of paramount importance in extending shelf life and minimizing food spoilage. In this work, a modified HKUST-1 (i.e., HKUST-1-P) was added to a chitosan quaternary ammonium salt (CQAS)-gelatin matrix to prepare a food packaging film (i.e., HPCGF) with ethylene adsorption property and improved water stability. Molecular simulation revealed that the ethylene preferentially bonds to the C and O sites of HKUST-1, followed by the H and Cu sites to achieve adsorption. The physical adsorption performance of HKUST-1 and HKUST-1-P was 89.91 and 89.05 cm3/g STP, respectively. Moreover, HPCGF showed improved physicochemical (e.g., thermal stability, mechanical, and gas barriers) properties that are beneficial for food packaging. As a validation experiment, the effectiveness of HPCGF for preserving a climacteric fruit (banana) was demonstrated by absorpting the ethylene, maintaining the color and hardness, delaying lipid peroxidation, and prolonging shelf life of bananas. This study will aid in the development of novel packaging materials with ethylene adsorption properties for preserving perishable foods, helping reduce food waste.