Ylang-ylang (Cananga odorata) essential oils (EO) has several active components with flora odorants which are compatible with several foods and desserts. Incorporation of Ylang-ylang EO into biodegradable polymers potentially produce functional packaging, releasing desirable aroma which is attractive to consumers. This research aimed to enhance active function of biodegradable polyester blend films namely polybutylene adipate-co-terephthalate (PBAT) and polybutylene succinate (PBS) using cast extrusion with Ylang-ylang EO. Characterizations of the film include morphology, relaxation, infrared absorption and packaging properties. Adding EO gave a smoother microstructure and surface topography and modified the crystal lattice of the PBS phase. Infrared absorption indicated EO-polymer interaction involving C–H stretching vibration. Polymer relaxation influenced transport of gas molecules through PBAT/PBS/EO matrices. Decreased α-relaxation temperature suggested plasticization effects of the amorphous PBAT phase by EO, increasing oxygen and water vapor permeability by 2.52 and 1.16 times, respectively. Polymer relaxation and crystallinity influenced transport of non-polar oxygen through PBAT/PBS/EO matrices. Moreover, films containing EO effectively delayed fungal growth in pandan pudding and layered pudding by more than 3 days due to the release of volatiles that exhibited antifungal activities. Findings suggested potential of Ylang-ylang EO incorporated biodegradable films to produce active packaging for aroma release, extending product shelf-life.