In this study, carboxymethyl chitosan with gum Arabic (CG) based novel functional films containing Cinnamomum camphora seeds extract (CCSE) at varying concentrations (0.5, 1.2 and 2% in w/w) were successfully fabricated. Moreover, sixteen phenolic compounds were identified by LC-ESI-QTOF-MS and the most abundant organic acid was citric acid (present at 1062.55 µg/g dry weight in CCSE). SEM showed that higher extract concentration indicated a homogeneous surface and more stability of films. CCSE inclusion into CG resulted in a marked increase (33.01 to 63.23 MPa) of tensile properties, with optimum thickness. The swelling degree, water solubility, and water vapor permeability were markedly (p < 0.05) reduced from 54.21 to 31.70%, 32.05 to 14.02%, and 3.46 to 1.12 × 10−11g−1s−1Pa−1, respectively. The open control and CG samples showed much higher peroxide values of sunflower oil (69.49 ± 0.68 and 20.15 ± 0.31 mEq/kg, respectively) while CG-CCSE2 exhibited a low value (9.79 ± 0.28 mEq/kg) after 28 days incubation. The good antioxidant and antimicrobial properties exhibited by the fabricated films demonstrated their potential use in the food packaging industry.