Development of edible films from food-grade biopolymers such as carbohydrates, proteins, lipids, and their composites has been a subject of extensive research. However, such films demonstrated inadequate protection when applied on real food models. In the recent past, incorporation of essential oil–based compounds to biopolymer-based edible films has been associated to induce multiple functionalities. Some important features of such edible films include improved mechanical and barrier properties, and controlled release of active ingredients. Furthermore, the oil-entrapped films were found to be most effective in inhibiting the foodborne pathogens such as Escherichia coli O157:H7, Staphylococcus aureus, Salmonella enteritidis, Listeria monocytogenes, and Bacillus cereus. Development of such functional films is possible through preparation of oil-in-water emulsions used for delivery of the active ingredients. Therefore, the primary goal of this review was to discuss on the recent findings and developments that are linked to the oil-entrapped films. In addition, the possible limitations that incur upon addition of oil-loaded films were also addressed.