Novel multifunctional composite poly(lactic acid) (PLA) films with alginate microbeads containing silver nanoparticles (AgNPs) were developed for potential antimicrobial food packaging applications. AgNPs, 10–20 nm in size, were synthesized in a Na-alginate solution by a hydrothermal method yielding a sterile, pH neutral colloid solution of low viscosity that was electrostatically extruded to produce Ag/alginate microbeads (190 μm in size) with retained AgNPs. Dried microbeads were uniformly dispersed in PLA films with retained AgNPs as confirmed by UV–Vis spectroscopy and scanning electron microscopy. The films were characterized regarding thermal and mechanical properties as well as silver release in different food simulants. Results show that PLA matrix served as a diffusion barrier so that the released silver concentration in water after 10 days was within the prescribed limit of 0.05 mg kg−1 while the films induced inhibitory effects against Staphylococcus aureus in the agar diffusion test.