In recent years, there has been a marked increase in the interest in biodegradable polymer materials for the use in packaging, agriculture, medicine, and other areas. Biodegradable composite films has been fabricated, via peroxide initiated melt-compounding process, by blending low density polyethylene (LDPE) and chitosan, in a rotor disperser. Chitosan, maleic anhydride (MA), dicumyl peroxides (DCP) and oleic acid constituent in palm oil have been used as biodegradable filler, coupling agent, free radical initiator and Lewis acid catalyst, respectively. The palm oil serves the additional function of a plasticizer as indicated by the mechanical property studies. The hydrophilicity, thermal, biodegradablity and dielectric properties of the biocomposite system have also been investigated. Biodegradability of the samples has been studied by inoculating the films with Aspergillus niger (A. niger) on a potato dextrose agar media and incubated at surrounding temperature (25 degrees C) for 21 days. After incubation, the films were again subjected to morphological and tensile studies. Hydrophilicity and biodegradation rate has been found to increase with increase in chitosan loading in the matrix. The plasticized samples showed better biodegradablity rate and hydrophilicity compared to the unplasticized ones. The addition of palm oil retains the thermal stability of the present biocomposite film. Chitosan and palm oil hybrid reinforced LDPE has proved to be a novel combination with increased biodegradable rate of LOPE. The improved dielectric property of the composite has also enhanced the antibacterial properties. The tailor-made biodegradable plastic film proves to be eco-friendly alternatives to synthetic plastics and have invoked potential applications in food-packaging, bio-separations and drug delivery. (C) 2012 Elsevier B.V. All rights reserved.