This study examines the chemical constituents, antioxidant potential, antibacterial mechanism, and antiproliferative activity of Cinnamomum zeylanicum bark essential oil. The compositions of the oil were analyzed by GC‐MS, and the major constituents were found to be (E)‐cinnamaldehyde (71.50%), linalool (7.00%), β‐caryophyllene (6.40%), eucalyptol (5.40%), and eugenol (4.60%). C. zeylanicum essential oil contained remarkable levels of phenolic and bioactive compounds with outstanding ability to scavenge free radicals and inhibit β‐carotene oxidation. The growth of pathogenic and spoilage bacteria, especially Gram‐positive ones (i.e. Listeria innocua, Staphylococcus aureus, and Bacillus cereus), was highly inhibited by the oil, compared to the Gram‐negative pairs (i.e. Escherichia coli, Pseudomonas aeruginosa, and Salmonella typhi). The cells of L. innocua and E. coli (as the most sensitive and resistant strains to the oil, respectively) treated with C. zeylanicum essential oil were observed by scanning electron microscopy to unravel structural changes. It was observed that the essential oil quickly exerted its antibacterial activity through disrupting cell envelope and facilitating the leakage of intracellular compounds. The essential oil had also a dose‐dependent antiproliferative effect on adipose‐derived mesenchymal stem cells (AT‐MSCs), and the cell proliferation could be induced by low concentrations of the oil. The present study indicated that C. zeylanicum essential oil with remarkable antioxidant and antimicrobial properties could be applied to develop novel natural preservatives for food and medicinal purposes.