Petroleum-based plastics are used for various purposes and pose a significant threat to the earth’s environment and ecosystem. Many efforts have been taken globally in different areas to find alternatives. As part of these efforts, this study manufactured alginate-based polyvinyl alcohol (PVA) blended films by casting from an aqueous solution prepared by mixing 10 wt% petroleum-based PVA with biodegradable, marine biomass-derived alginate. Glutaraldehyde was used as a cross-linking agent, and cardanol, an alkyl phenol-based bio-oil extracted from cashew nut shell, was added in the range of 0.1 to 2.0 wt% to grant antibacterial activity to the films. FTIR and TGA were performed to characterize the manufactured blended films, and the tensile strength, degree of swelling, and antibacterial activity were measured. Results obtained from the FTIR, TGA, and tensile strength test showed that alginate, the main component, was well distributed in the PVA by forming a matrix phase. The brittleness of alginate, a known weakness as a single component, and the low thermal durability of PVA were improved by cross-linking and hydrogen bonding of the functional groups between alginate and PVA. Addition of cardanol to the alginate-based PVA blend significantly improved the antibacterial activity against S. aureus and E. coli. The antibacterial performance was excellent with a death rate of 98% or higher for S. aureus and about 70% for E. coli at a contact time of 60 minutes. The optimal antibacterial activity of the alginate-PVA blended films was found with a cardanol content range between 0.1 to 0.5 wt%. These results show that cardanol-containing alginate-PVA blended films are suitable for use as various antibacterial materials, including as food packaging.