ABSTRACT: Edible films were prepared from a mixture of partially hydrolyzed sago starch and alginate (SA). Lemongrass oil (0.1% to 0.4%, v/w) and glycerol (0% and 20%, w/w) were incorporated in the films to act as natural antimicrobial agent and plasticizer, respectively. The films were characterized for antimicrobial activity, water vapor permeability (WVP), tensile strength (TS), percent elongation at break (%E), and water solubility (WS). Fourier transform infrared (FTIR) spectroscopy was conducted to determine functional group interactions between the matrix and lemongrass oil. The zone of inhibition was increased significantly (P < 0.05) by addition of lemongrass oil at all levels in the presence and the absence of glycerol. This indicates that the film containing lemongrass oil was effective against Escherichia coli O157:H7 at all levels. In the absence of glycerol, the tensile strength of film decreased as the oil content increased, but there was no significant (P > 0.05) difference in percent elongation. The percent elongation at break and WVP values for film with 20% glycerol was found to be increased significantly (P < 0.05) with an increase in lemongrass oil content. Addition of lemongrass oil did not have any interaction with the functional groups of films as measured by FTIR.