Chitosan the second most abundant polysaccharide is biodegradable, biocompatible, and non-toxic. These properties makes chitosan widely applicable in the pharmaceutical and biomedical fields for controlled release of drugs for wound management and space filling implants etc. In the present study fungal chitosan is isolated form Cunninghamella elegans, characterized by FT-IR spectroscopy by confirming the functional groups exhibiting the main characteristic bands of carbonyl (C=O-NHR) and amine group (-NH2) at 1632 cm-1. The characteristic absorption bands of chitosan are at 1076.09–1155.61 cm−1, confirms that the monomers in chitosan are linked by d-glycosidic linkages, the same holds for the bonds between the monomers in the glucan component. The obtained fungal chitosan was bound with tetracycline to form nanocomposite based films and examined under FeSEM and AFM. Prepared nanocomposite films were further subjected to antibacterial activity against Gram positive and Gram negative bacteria.