We report a robust biofilm with antimicrobial properties fabricated from chitosan-iron oxide coated graphene oxide nanocomposite hydrogel. For the first time, the coprecipitation method was used for the successful synthesis of iron oxide coated graphene oxide (GIO) nanomaterial. After this, films were fabricated by the gel-casting technique aided by the self-healing ability of the chitosan hydrogel network system. Both the nanomaterial and the nanocomposite films were characterized by techniques such as scanning electron microscopy, FT-IR spectroscopy, X-ray diffraction, and vibrating sample magnetometry. Measurements of the thermodynamic stability and mechanical properties of the films indictaed a significant improvement in their thermal and mechanical properties. Moreover, the stress-strain profile indicated the tough nature of the nanocomposite hydrogel films. These improvements, therefore, indicated an effective interaction and good compatibility of the GIO nanomaterial with the chitosan hydrogel matrix. In addition, it was also possible to fabricate films with tunable surface properties such as hydrophobicity simply by varying the loading percentage of GIO nanomaterial in the hydrogel matrix. Fascinatingly, the chitosan-iron oxide coated graphene oxide nanocomposite hydrogel films displayed significant antimicrobial activities against both Gram-positive and Gram-negative bacterial strains, such as methicillin-resistant Staphylococcus aureus, Staphylococcus aureus, and Escherichia coli, and also against the opportunistic dermatophyte Candida albicans. The antimicrobial activities of the films were tested by agar diffusion assay and antimicrobial testing based on direct contact. A comparison of the antimicrobial activity of the chitosan-GIO nanocomposite hydrogel films with those of individual chitosan-graphene oxide and chitosan-iron oxide nanocomposite films demonstrated a higher antimicrobial activity for the former in both types of tests. In vitro hemolysis potentiality tests and MTT assays of the nanocomposite films indicated a noncytotoxic nature of the films, which conveyed the possibility of potential applications of these soft and tough films in biomedical as well as in the food industry.