Orthopedic implant failure due to bacterial infection has been a concern in bone tissue engineering. Here, we have formulated a composite made of biodegradable polymer, i.e., poly(3‐hydroxybutyrate‐co‐3‐hydroxyvalerate) (PHBV), and silver chloride. Ag+ ions released from the AgCl/PHBV film can promote an aseptic environment by promoting inhibition of bacterial growth while maintaining bone cell growth, depending on AgCl loading. The objective of this study is to formulate AgCl/PHBV film(s) of varying composition so as to evaluate the dependence of AgCl loading in the film on antimicrobial activity and cytotoxicity. The release kinetics of silver ions from AgCl/PHBV film in aqueous and Dulbecco's Modified Eagle Medium showed similarity in the initial burst of ions during the first day of desorption followed by a gradual release of ions over extended time period. The antibacterial efficacy of AgCl/PHBV film against Escherichia coli, Staphylococcus aureus, and Pseudomonas aeruginosa was evaluated by microbiological assay, while cytotoxicity of the film toward MC3T3‐E1 cells was determined by MTT assay. For all compositions studied, a clear zone of inhibition around AgCl/PHBV film was noticed on a modified Kirby‐Bauer disk diffusion assay. We established that MC3T3‐E1 cell attachment on AgCl/PHBV film is strongly related to loading of AgCl in the film. © 2017 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2017, 134, 45162.