The steep increase in global food packaging waste has caused various environmental concerns and demands a reliable alternative. To meet the demand, bioactive and biodegradable films can be used as packaging material and the incorporation of natural food additives can also further increase the shelf life of the food. The essential oil extracted from plants and spices have a broad spectrum of antimicrobial activity and antioxidant activity which can be used as an additive in food packaging material to reduce the deterioration of food by common food borne pathogens. In this report, we have extracted essential oil from Plectranthus amboinicus and incorporated it into chitosan films. This biodegradable film incorporated with Plectranthus amboinicus essential oil showed improved functional properties of the films such as tensile strength, opacity, and water vapor barrier. The essential oil also exhibited promising antimicrobial activity against food pathogens. Hence, essential oil incorporated biodegradable films can be used for food packaging to extend its shelf life.