As global interest in renewable resources rises, sugarcane (Saccharum officinarum) bagasse has garnered attention as a valuable biomass resource for various applications. In this work, cellulose nanofibers were extracted from sugarcane bagasse and employed as a reinforcement for fabricating nanocomposite films. Different concentrations of Japanese yuzu (Citrus junos) essential oil (YEO) (3.5, 7, 10.5, 14, and 17.5 wt %) were introduced to investigate their effects on the physical attributes of the nanocomposite films. The outcomes demonstrated that the nanocomposite films exhibited poor physical properties as the concentrations of YEO increased. Specifically, the water contact angle (< 68.23 ± 0.82°) and mechanical strength (< 44.56 ± 0.44 MPa) of the films decreased, while the elongation at break (> 5.79 ± 0.07%) increased. An increase in water solubility (> 22.70 ± 0.75%) and water vapor permeability (> 1.09 ± 0.06 g mm/m2 d kPa) were also observed. These findings were attributed to their uneven surface distribution and potential interactions within the matrix that compromised their structural integrity. Despite their poor physical properties, it is believed that this presented study holds potential for developing active food packaging applications to enhance the preservation period, quality and, safety of food products, which could be explored further in future research.