This study aimed to explore the properties of cellulose nanocrystals (CNC)/polyvinyl alcohol (PVA) composite films with and without 1,2,3,4-butane tetracarboxylic acid (BTCA), a nontoxic cross-linker. CNC and CNC-PVA nanocomposite films were prepared using solution-casting technique. Differential scanning calorimetry (DSC) analyses showed that crosslinking increased the glass transition temperature but reduced the melting temperature and crystallinity. Furthermore, high CNC concentrations in the PVA matrix interfered with PVA crystallinity, whereas in specific ratio between CNC and PVA, two different crystalline structures were observed within the PVA matrix. Film surfaces and fracture topographies characterized using SEM indicated that at certain CNC-PVA ratios, micron-sized needle-like crystals had formed. These crystalline structures correlated with the remarkable improvement in mechanical properties of the CNC-PVA nanocomposite films, i.e., enhanced tensile strain and toughness to 570% and 202 MJ/m3, respectively, as compare to pristine PVA. BTCA enhanced the tensile strain, ultimate tensile stress, toughness and modulus of CNC films compared to pristine CNC films. Water absorption of crosslinked CNC and CNC-PVA nanocomposite films was significantly reduced, while film transparency was significantly improved as a function of PVA and crosslinker content. The presented results indicate that CNC-PVA nanocomposite films may find applications in packaging, and though materials applications.