Chitosan and egg phosphatidylcholine (ePC) were used as a unique combination to prepare composite films for localized drug delivery. In comparison to other phospholipids analyzed, ePC was found to produce chitosan-based films with minimal swelling and a high degree of stability. The properties of the chitosan-ePC films were characterized and found to be dependent on the ratio of chitosanePC present. FTIR analysis of chitosan-ePC films revealed that their high stability may be attributed to interactions present between these two biomaterials. In vitro evaluation of the cytotoxicity and protein adsorption properties of the films were used to provide a preliminary indication of their biocompatibility. The chitosan-ePC film was also evaluated as a matrix for the localized delivery of the anti-cancer agent, paclitaxel. Nanoparticles containing paclitaxel were dispersed throughout the chitosan-ePC film to result in a drugmaterial ratio of 18 (wt/wt). The film was found to provide a sustained release of paclitaxel over a 4-month period in biologically relevant media. The biological activity of paclitaxel loaded in the chitosan-ePC film was confirmed in SKOV-3 human ovarian cancer cells.