Bio-nanocomposites based on starch are reinforced by different percentages of chitin nanofibers (ChNFs) and compatibilized by glycerol. Nanofibers are extracted from Mucor indicus fungus through different chemo-mechanical pretreatments. The mechnical, chemo-physical, and morphological properties of the nanocomposite starch films were evaluated and compared with the unfilled thermoplastic starch (TPS) film. Based on the obtained results, Young's modulus of the film at 5 wt.% ChNFs indicated 239% enhancement compared to the TPS film due to the existence of good interactions between starch and ChNFs. Moreover, the ultimate strength of the reinforced film at 5 wt.% ChNFs and the unreinforced counterpart are found to be 5.5 and 1.74 MPa, indicating 216% improvement; however, the elongation at break of the films decreases from 59.3% to 19.3% by adding 5 wt.% ChNFs. In addition, the moisture absorption of the film decreases after the incorporation of ChNFs. Based on the morphological study, ChNFs increase the roughness of the starch matrix with a homogenous morphology revealing the good dispersion of nanofibers in the TPS film. Finally, the nanocomposite film with 5 wt.% ChNFs show the best properties to employ for bio-film applications.