Chitosan is a biopolymer known for its rapid biodegradability and film-forming properties. This research aimed to synthesize and characterize chitosan films loaded with cashew leaf extract (CLE) obtained from immature and mature cashew leaves via aqueous and 70% ethanolic extraction methods. Freeze-dried CLE samples were dissolved in 50% dimethyl sulfoxide for in vitro analysis and chitosan film preparation. The total phenolic content of mature cashew leaves extracted in ethanol (MECLE) showed higher free radicle scavenging activity by a 2,2-diphenyl-1-picrylhydrazyl assay than the other extracts (p < 0.05). MECLE displayed a lower minimal inhibitory concentration, minimum fungal concentration, and higher zone of inhibition against Aspergillus niger compared to the other treatments (p < 0.05). Film-forming solutions were prepared using 2% chitosan, 2% chitosan with 5% mature cashew leaves extracted in deionized water (MACLE) (w/v), and 2% chitosan with 5% MECLE (w/v), respectively, to cast films. Of these, 2% chitosan (CH) with 5% MECLE (CH-MECLE-5) displayed the highest thickness and water vapor transmission rate, water vapor permeability, and oxygen transmission rate when compared to other film samples (p < 0.05). The CH-MECLE-5 film showed the highest inhibition zone of A. niger compared to the control and treated films (p < 0.05). The lightness (L*) of the CH-MECLE-5 film decreased with increment in b* values, which represented the yellow color of the film. In addition, two-photon microscopy revealed a uniform distribution via the auto-fluorescent 3D structure of MECLE in the CH-MECLE-5 film. Therefore, chitosan combined with 5% MECLE may be a potential bioactive and eco-friendly packaging film.