MgO nanoparticles were synthesised using a novel in-situ method. Chitosan/MgO nanocomposite thin films were fabricated by solution casting method. The addition of MgO into chitosan resulted in 86% improvement in tensile stress. Chitosan/MgO nanocomposites exhibited higher thermal stability and flame retardancy. Chitosan with MgO nanoparticles also showed superior UV-shielding abilities.