Biodegradable polymeric materials based on blending aqueous dispersions of natural polymer sodium alginate (NaAlg) and povidone iodine (PVPI) complex, which allow controlled antiseptic release, are presented. The developed materials are either free standing NaAlg films or Ca(2+)-cross-linked alginate beads, which properly combined with PVPI demonstrate antibacterial and antifungal activity, suitable for therapeutic applications, such as wound dressing. Glycerol was used as the plasticizing agent. Film morphology was studied by optical and atomic force microscopy. It was found that PVPI complex forms well dispersed circular micro-domains within the NaAlg matrix. The beads were fabricated by drop-wise immersion of NaAlg/PVPI/glycerol solutions into aqueous calcium chloride solutions to form calcium alginate beads encapsulating PVPI solution (CaAlg/PVPI). Controlled release of PVPI was possible when the composite films and beads were brought into direct contact with water or with moist media. Bactericidal and fungicidal properties of the materials were tested against Escherichia coli bacteria and Candida albicans fungi. The results indicated very efficient antibacterial and antifungal activity within 48 h. Controlled release of PVPI into open wounds is highly desired in clinical applications to avoid toxic doses of iodine absorption by the wound. A wide variety of applications are envisioned such as external and internal wound dressings with controlled antiseptic release, hygienic and protective packaging films for medical devices, and polymer beads as water disinfectants.