Food packaging based on biodegradable material attracts a lot of attention nowadays. Chitosan (CS) is an available biopolymer that has been extensively studied as a potential source for food packaging. However, its weak barrier for water vapor diffusion and mechanical properties need to be improved. Oxidized nanocellulose (ONC) has been prepared from date palm sheath fibers by the ''green'' ammonium persulfate (APS) hydrolysis. The particle size distribution confirmed the success of ONC extraction. The CS/bio-composites were loaded with 1, 3, 5, 7 and 10% ONC-I and II fractions. The FTIR spectroscopy analysis was carried out to investigate the types of interaction exerts between these bio-composite components. The water vapor permeability, water sorption isotherm and mechanical test of the neat CS film and CS/bio-composite films were studied. Cellulose polymorphism was found to be an important factor which could influence the bio-composite properties.