This article presents the isolation of arabinoxylan (AX) from Plantago ovata seed husk and its oxidation using periodate to create oxidized‐AX (OAX) with distinct functionalities. Utilizing the solution casting method, biocompatible blends of arabinoxylan/chitosan (AX/CS) are prepared at various weight ratios, and their properties are assessed. Fourier transform infrared spectroscopy (FT‐IR), x‐ray diffraction (XRD), and thermogravimetric analysis (TGA) are employed to gauge compatibility and thermal traits of AX and OAX with CS. Solubility tests reveal partial and limited solubility of AX and OAX in distilled water, respectively. OAX displays favorable compressibility and flow rate through Carr's index, Hausner's ratio, and angle of repose analyses. FT‐IR data confirm intermolecular hydrogen bonding between CS′s −NH2− group and OAX′s carbonyl group, with XRD showing low crystallinity. Diclofenac sodium (DC) is loaded as a model drug into AX/CS and OAX/CS blends for release studies in pH 6.8 phosphate buffer. Results exhibit OAX/CS blends with sustained drug release, surpassing AX/CS blends. Among ratios tested, the OAX/CS (1 : 2) blend emerges as a superior excipient, demonstrating enhanced in‐vitro release potential, highlighting oxidized blends′ promise in sustained drug delivery systems.