In this study, edible films composed of 1% (w/v) alginate (Alg) and ylang‐ylang essential oil (YYEO, 0.1%, 0.3%, and 0.5%) were fabricated and characterized for the first time. The alginate suspension viscosity increased significantly from 255.8 to 290.5 Cp, with a corresponding significant film thickness increase from 0.029 to 0.043 mm. There was also a significant decrease in moisture content (MC%) from 30.22 to 23.93%. Scanning electron microscopy and atomic force microscopy analyses showed an increased Alg/YYEO film roughness. The presence of YYEO in the alginate film was confirmed by Fourier transform infrared spectroscopy and confocal laser scanning microscopy. YYEO addition induced no significant change in total color difference (ΔE). There was a decrease in tensile strength and a significant (p < 0.05) increased elongation at break (EAB%) by 83.11%. The Alg/0.3% YYEO film demonstrated improved water vapor permeability compared with the other films. The Alg/0.5% YYEO film had strong antioxidant scavenging properties (27.94%), and an opacity of 3.60 A/mm. Both the Alg/0.3% YYEO and 0.5% YYEO coating solutions greatly improved antifungal properties against Botrytis cinerea. Therefore, alginate films incorporating YYEO are viable materials for edible films and coatings in fresh produce packaging.