Whey protein and cellulose derivatives are abundant and renewable raw materials that provide an environmentally friendly alternative to fossil fuel sources used for food packaging. A novel biodegradable composite film comprising whey protein concentrates (WPC) aqueous solutions (10%, w/v) with different concentrations of Hydroxypropyl methylcellulose (HPMC) (0, 1, 2, 3, 4 and 5 wt% of WPC) was prepared in the present study. The effect of transglutaminase (TG) on the functional properties of the film was investigated. SDS‐PAGE profiles indicated that TG modulated the formation of intermolecular cross‐linking of WPC. FT‐IR results showed that HPMC modified the mechanical properties of WPC. Incorporation of HPMC decreased the transparency and improved the tensile strength and extensibility of the film. TG addition led to a significant enhancement of the mechanical properties of the film. These findings indicated that TG promoted the formation of WPC‐HPMC composite film with improved mechanical properties.