Recently, chitosan has become attractive due to being biodegradable, biocompatible and renewable. However, the weak mechanical properties of chitosan films limit their large-scale application. In this work, a strategy of blending TEMPO, oxidized CNF (TOCN) and chitosan was developed to fabricate nanocomposite films in order to improve the mechanical properties and maintain biocompatibility. The TOCN/chitosan nanocomposite films exhibited excellent optical transmittance (>85%) and extremely high tensile strength of 235 MPa. The good compatibility of TOCN and chitosan chains, good dispersion of chitosan aggregates and the presence of stiff TOCN crystal domains are the main reasons for getting improved mechanical strength of composite films. The films showed good biocompatible properties based on the cell activity assay results. Furthermore, they were stable in PBS buffer for more than 6 months without significant degradation. The TOCN/chitosan nanocomposite films with these excellent properties could be employed in medical applications.