Octa TMA POSS (POSSA) is used as a nano-filler for chitosan films to improve their water barrier and mechanical properties. The composite films prepared by solution-blending were characterized by water vapor permeability measurement, contact angle, swelling and solubility test, adsorption isotherm, tensile test, rheological test, SEM, as well as XRD. The results indicated that the water vapor permeability (WVP) of the composite films decreased with the addition of POSSA. Particularly, when the loading amount of POSSA was 3%, WVP of the composite films was 15.9% lower than that of the pure chitosan film. The tensile properties of the chitosan films were also improved considerably with the addition of POSSA. When the loading was less than 5%, the tensile strength and MOE of the composite films were improved. In conclusion, addition of POSSA is able to improve the water barrier properties and mechanical properties of chitosan film, thus making it a good candidate for food packaging applications.