In this study, 10 wt% sugarcane bagasse fiber-reinforced starch foam composites were prepared with different oregano essential oil (OEO) contents in the range of 2–8 wt% to improve the antimicrobial effectiveness of bioactive packaging. FT-IR analysis confirms that OEO penetrates into starch foam composite. From the result of antimicrobial activity, the incorporation of 8 wt% OEO in starch foam composite achieves the minimum inhibitory concentration against <italic>Escherichia-coli</italic> (<italic>E. coli</italic>) and <italic>Staphylococcus-aureus</italic> (<italic>S. aureus</italic>). OEO is more effective against <italic>S. aureus</italic> (Gram-positive bacteria) than <italic>E. coli</italic> (Gram-negative bacteria). The water absorption capacity and hygroscopicity of foam composite decrease with increasing OEO content. The lowest monolayer value is observed in starch foam composite containing 8 wt% OEO. The soil biodegradation rate and flexural strength of samples slightly decrease with increasing OEO content. As a result, starch foam composite containing OEO can be applied as bioactive packaging to preserve foods.