An effective way of covalently functionalizing graphene with a chitosan polymer via a nitrene chemistry is demonstrated. The biofunctionalized graphene is prepared by the chemical reduction of graphene oxide using a nitrene chemistry, and then covalently grafting chitosan to the graphene surface. The effectiveness of the biofunctionalized graphene as a reinforcing filler (4 wt%) in a chitosan polymer matrix is verified by the dramatic enhancement of the mechanical properties (breaking stress = 330%, Young's modulus = 243%) and the electrical conductivity (0.3 S m−1) without much loss in the elongation-at-break. The reinforcing effect can be explained by both the homogeneous dispersion of graphene within the matrix and the strong bond arising from the intrinsically intimate contact between the graphene and the matrix. The high antimicrobial activity of the biofunctionalized graphene compared with graphene oxide and chemically reduced graphene may be because of the presence of chitosan polymer on the edges of the graphene. The strong, antimicrobial graphene-filled composite film can be used for food packaging and for coating various biomedical devices, where bacterial surface colonization is undesirable.