The research explores application of natural biopolymer chitosan for incorporating fragrance oil into automotive fabrics and its antimicrobial properties relevant to automotive interior textiles. The application of microencapsulated strawberry fragrance oil was studied to overcome the low durability issue. The microencapsulated fragrance oil was applied to the greige and finished commercial 100% polyester woven and knitted fabrics, in combination with chitosan and then assessed for smell retention. It was concluded that application of the microencapsulated fragrance oil to the 100% polyester fabrics in combination with chitosan produced durable fragrance finish. The treated fabrics were also assessed for their antimicrobial properties. The results indicated that the treated fabrics displayed excellent antimicrobial properties. The study concluded that the use of chitosan as a binder for the application of microencapsulated fragrance oil results in high fragrance retention in 100% polyester automotive fabrics and also produces excellent antimicrobial attributes in these fabrics.