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The loss of fresh produces owing to the microbial infestation is a major challenge to the global food industry. The drastic food loss caused mainly by the fungal attack demands the need for development of active packaging materials with antimicrobial properties. Many studies have already been reported on the applications of polymers like polyvinyl alcohol (PVA) engineered with antimicrobial components as active antifungal packaging materials. In the current study, material properties of PVA alone, PVA incorporated with chitosan nanoparticles (PCS), clove oil (PCO), and their combination (PCSCO) have been studied for its microbial barrier and antifungal properties. All the developed films were characterised by the XRD and FTIR analysis, which confirmed the molecular interactions among the individual components of the nanocomposite. At the same time, the bionanocomposite PCSCO was found to have low moisture content and film solubility indicating its suitability for the modified atmosphere packaging applications. In addition, the presence of chitosan nanoparticles and clove oil was found to provide the microbial barrier properties to the PCS, PCO, and PCSCO films. The PCSCO film was further demonstrated to have superior antifungal activity against the selected Pythium aphanidermatum. The results of the study indicate the potential application of developed nanocomposite film as a promising antifungal packaging material. [ABSTRACT FROM AUTHOR]