Antifungal bioplastic films were developed based on poly(lactic acid) (PLA) and poly(butylene adipate-co-terephthalate) (PBAT) blends as PLA60/PBAT40 (PLA/PBAT) and PBAT60/PLA40 (PBAT/PLA) with incorporated trans-cinnamaldehyde using cast-extrusion. Trans-cinnamaldehyde was more compatible in PLA which exhibited plasticization that increased molecular mobility, crystallinity, permeability but limited volatile release and reduced film strength. Interaction of trans-cinnamaldehyde modified CO functional groups of PLA and PBAT. Phase separation was higher in PBAT/PLA films due to less surface adhesion in PBAT networks. Higher release of trans-cinnamaldehyde enhanced bread crystallinity but gave lower rate of hardness increase due to plasticization of starch and protein and reduced lipid crystallinity. Increased bread hardness correlated with decreased water activity that was effectively prevented by higher release of trans-cinnamaldehyde. Films containing trans-cinnamaldehyde (2–10%) showed high antifungal efficacy against Penicillium sp. and Aspergillus niger but low effective against Rhizopus sp. Trans-cinnamaldehyde reduced bacterial and fungal growth in breads, extending shelf-life for 21 days.