Covalent surface functionalization of synthesized ZnO nanoparticles (NP)s with ethylenediaminetetraacetic acid (EDTA) was successfully carried out. Modified ZnO‐EDTA NPs as a viable and inexpensive filler were incorporated into poly(vinyl chloride) PVC matrix after their chemical modification to investigate the agglomeration behavior. All prepared materials including modified NPs and PVC/ZnO‐EDTA nanocomposites (NC)s were analyzed by Fourier transform infrared spectroscopy, ultraviolet–visible spectroscopy, thermogravimetric analysis, X‐ray diffraction, field emission scanning electron microscopy and transmission electron microscopy. Fabricated PVC/ZnO‐EDTA NCs were reported to have high transparency and improved mechanical properties compared with PVC. Modified ZnO and the fabricated NCs were shown to exhibit excellent antibacterial activity against two bacteria species: Escherichia coli and Staphylococcus aureus. The obtained NCs could be considered as self‐extinguishing materials on the basis of the LOI values. Copyright © 2016 John Wiley & Sons, Ltd.