Biodegradable polymers can be used for eco-friendly, functional, active packaging to preserve food quality. Incorporation of titanium dioxide (TiO₂) nanoparticles into polymer packaging enhances ethylene-scavenging activity and extends the shelf-life of fresh produce. In this study, TiO₂ nanoparticles were incorporated into biodegradable poly(butylene adipate-co-terephthalate) (PBAT)- and thermoplastic cassava starch (TPS)-blended films to produce nanocomposite packaging via blown-film extrusion. The effects of TiO₂ on morphology, packaging properties, and applications as functional packaging for fresh produce were investigated. Increased TiO₂ in the film packaging increased amorphous starch content and hydrogen bonding by interacting with the TPS phase of the polymer blend, with negligible chemical interaction with the PBAT component and identical mechanical relaxation in the PBAT phase. Surface topography indicated void space due to non-homogeneous dispersion causing increased oxygen and carbon dioxide permeability. Homogeneous dispersion of fine TiO₂ nanoparticles increased mechanical strength and reduced oxygen, carbon dioxide, and water vapor permeability. Films containing TiO₂ also showed efficient oxygen-scavenging activity that removed residual oxygen from the package headspace dependent on the levels and morphology of nanoparticles in the film matrices. Banana fruit packaged in films containing TiO₂ recorded slower darkening color change and enhanced shelf-life with increasing TiO₂ content.