Natural additives, particularly essential oils, have gained widespread recognition for their role in enhancing the attributes of natural edible polymers. Comprising a wealth of hydrophobic and volatile compounds, essential oils exhibit notable antioxidant and antimicrobial properties owing to their rich composition of terpenes and aromatic constituents. This review underscores the multifaceted biological properties of essential oils, encompassing their incorporation into films, edible coatings, and nanoencapsulated materials. The effect of utilizing several essential oils as natural additives in combination with different raw materials and plasticizers was compared to the evaluation of their impact on the material properties of films and edible coatings, offering an in-depth analysis of the specific essential oil variants featured in the recent literature. Among the essential oils reviewed, those derived from clove, cinnamon, and oregano emerge as the predominant choices, representing some of the most promising natural additives for biodegradable packaging. Nanoencapsulation techniques have also expanded the role of essential oils in sustainable food packaging by increasing their stability.