In the context of emerging global concerns with synthetic plastic packaging, alternative natural biodegradable packaging materials are gaining increasing attention for food packaging applications. In this study, chitosan and gelatin nanocomposite hybrid films containing green synthesized zinc oxide (ZnO) nanoparticles (NPs) were developed and microstructural properties were studied. Antimicrobial activity of the developed films was evaluated using both Gram negative (Escherichia coli) and Gram positive bacteria (Staphylococcus aureus). Green synthesis protocol was used for the precipitation of ZnO NPs using fruit extract of Cassia fistula. The as-synthesized polyhedral ZnO NPs were in the range of 20–40 nm (average size ≈29 nm). Reinforcement with ZnO NPs in the hybrid films lead to improved thermal stability, elongation-at-break (EAB), and compactness properties. The developed films with 2% and 4% ZnO NPs showed a smooth, compact, and heterogeneous surface morphology compared to the control (chitosan-gelatin hybrid) films. Disc diffusion assays showed that the nanocomposite film had significant antimicrobial activity against E. coli. The developed hybrid nanocomposite films have potential to be developed as biodegradable alternative for postharvest packaging of fresh fruits and vegetables.