Films formed by blending of two polymers usually have modified physical and mechanical properties compared to films made of the individual components. Our preliminary studies indicated that incorporation of chitosan in polyethylene oxide (PEO) films may provide additional functionality to the PEO films and may decrease their tendency to spherulitic crystallization. The objective of this study was to determine the correlation between chitosan/PEO weight ratio and the physical, mechanical, and antibacterial properties of corresponding films. Films with chitosan/PEO weight ratios from 100/0 to 50/50 in 10% increments were characterized by measuring thickness, puncture strength (PS), tensile strength (TS), elongation at break (%E), water vapor permeability (WVP), and water solubility (WS). Additionally, the films were examined by polarized microscopy, wide-angle X-ray diffraction (WAXD), and Fourier transform infrared (FTIR) spectroscopy, and their antibacterial properties were tested against Escherichia coli. The chitosan fraction contributes to antimicrobial effect of the films, decreases tendency to spherulitic crystallization of PEO, and enhances puncture and tensile strength of the films, while addition of the PEO results in thinner films with lower water vapor permeability. Films with 90/10 blend ratio of chitosan/PEO showed the most satisfactory PS, TS, %E, and antibacterial properties of all tested ratios.