In this study, the properties of poly (vinyl alcohol) (PVA) films incorporated with Zataria multiflora essential oil (ZMO) as a potential antioxidant/antibacterial material was investigated. PVA films were prepared from PVA solutions (2% w/v) containing different concentrations of ZMO. Water solubility, moisture absorption, water swelling, and water vapor permeability for pure PVA films were 57 ± 1.1, 99 ± 3.2%, 337 ± 8%, and 0.453 ± 0.015 g mm/m2 h, respectively. Incorporation of ZMO into PVA films caused a significant decrease in water swelling and moisture absorption and increase in solubility and water vapor permeability. Tensile strength, elastic modulus, and elongation at break for pure PVA films were 13.5 ± 0.61 MPa, 15.2 ± 0.8 MPa, and 216 ± 4%, respectively. Incorporation of ZMO into the PVA films caused a significant decrease in tensile strength and elastic modulus and increase in elongation at break of the films. Pure PVA film showed UV‐visible light absorbance ranging from 280 to 440 nm with maximum absorbance at 320 nm. Addition of ZMO caused a significant increase in light absorbance and opacity. PVA films exhibited no antioxidant and antifungal activities, whereas PVA/ZMO films exhibited excellent antioxidant and antifungal properties. Although the bioactivity PVA films were improved by the addition of ZMO, however, the mechanical properties and water binding capacity of the films were weaken slightly. Thus, ZMO emulsified in the ethanol not compatible with PVA matrix and more suitable emulsifier was needed in order to obtain strong film with higher mechanical properties. © 2014 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2014, 131, 40937.