In this work, the Ocimum basilicum L. extract (OCE) was encapsulated in a cellulose nanofiber/chitosan composite system (CNF/CH) and examined for phenolic release, antioxidant, and antibacterial activities. The prepared OCE loaded composite had a smooth and porous surface with a high swelling index (60 mL g−1). The zeta potential of the CNF/CH was 18.7±0.8 mV. The fabricated CNF/CH exhibited excellent total antioxidant activity (598 µgAAeq mg−1), total phenolic content (62.4 µgGAeq mg−1) and DPPH (1, 1-diphenyl-2 picrylhydrazyl) (83%) scavenging activity. In vitro release experiment demonstrated the prolonged-release (up to 50% after 6 hours) of phenolic from CNF/CH due to a concentration gradient between CNF/CH and the solution. The release of phenolic occurs through both fickian and non-fickian diffusion. The CNF/CH exhibited excellent antibacterial activity against Gram-positive (Streptococcus mutans) and Gram-negative (Salmonella typhimurium) bacterial strains with the inhibition percentage 97% and 99%, respectively. Results suggest that CNF/CH is a promising biomaterial for the development of the phenolic rich material and maintain the antioxidant activities of OCE.