Functionalized graphene-polymer nanocomposites have gained significant attention for their enhanced mechanical, thermal, and antibacterial properties, but the requirement of multi-step processes or hazardous reducing agents to functionalize graphene limits their current applications. Here, we present a single-step synthesis of thermally reduced graphene oxide (TrGO) based on shellac, which is a low-cost biopolymer that can be employed to produce poly(vinyl alcohol) (PVA)/TrGO nanocomposites (PVA-TrGO). The concentration of TrGO varied from 0.1 to 2.0 wt.%, and the critical concentration of homogeneous TrGO dispersion was observed to be 1.5 wt.%, below which strong interfacial molecular interactions between the TrGO and the PVA matrix resulted in improved thermal and mechanical properties. At 1.5 wt.% filler loading, the tensile strength and modulus of the PVA-TrGO nanocomposite were increased by 98.7% and 97.4%, respectively, while the storage modulus was increased by 69%. Furthermore, the nanocomposite was 96% more effective in preventing bacterial colonization relative to the neat PVA matrix. The present findings indicate that TrGO can be considered a promising material for potential applications in biomedical devices.