An innovative process for the adsorption of the hydrophobic Basil-Oil (BO) into the hydrophilic food byproduct chitosan (CS) and the development of an advanced low-density polyethylene/chitosan/basil-oil (LDPE/CS_BO) active packaging film was investigated in this work. The idea of this study was the use of the BO as both a bioactive agent and a compatibilizer. The CS was modified to a CS_BO hydrophobic blend via a green evaporation/adsorption process. This blend was incorporated directly in the LDPE to produce films with advanced properties. All the obtained composite films exhibited improved packaging properties. The film with 10% CS_BO content exhibited the best packaging properties, i.e., 33.0% higher tensile stress, 31.0% higher water barrier, 54.3% higher oxygen barrier, and 12.3% higher antioxidant activity values compared to the corresponding values of the LDPE films. The lipid oxidation values of chicken breast fillets which were packaged under vacuum using this film were measured after seven and after fourteen days of storage. These values were found to be lower by around 41% and 45%, respectively, compared with the corresponding lipid oxidation values of pure LDPE film.