Recently, biodegradable packaging materials have received significant prominence in the food sector. Herein, chrysanthemum leaves extract (CLE), integrated sodium alginate (SA) and polyvinyl alcohol (PVA) active films were prepared and their physicochemical and multifunctional properties were evaluated for use in green chili packaging. FTIR and SEM results confirmed favorable interaction and uniform dispersion of CLE in the SA/PVA blend film. Addition of CLE to the SA/PVA matrix considerably lowered surface wettability (∼61 %), water solubility (∼28 %), moisture-binding (∼27 %), water vapor transmission and oxygen permeability (∼28 %). CLE-loaded active film demonstrated higher tensile strength (29.06 ± 0.46 MPa), UV light barrier capabilities and significant antimicrobial activity against foodborne pathogens. Additionally, it had an adequate antioxidant capacity of (∼46 %) compared to the control film without CLE. In the study of green chili packaging, the active film containing a more significant amount of CLE limited the weight loss, suppressed microbial growth and retained the polyphenolic and chlorophyll content of the chili. Compared to polyethylene (PE), the fabricated active film displayed a far better packaging capability and extended the shelf life of green chili for up to 10 days. Hence, the fabricated active films were suitable for biodegradable packaging applications.