This paper introduces a detailed optical characterization for a novel fluorescent biodegradable nanocomposite of electro-spun chitosan nanofibers with in-situ embedded cerium oxide (ceria) nanoparticles as the nanocomposite optical fluorescent material. Under near ultra-violet excitation, this synthesized nanocomposite emits a visible green wavelength at nearly 520nmwith different intensities according to the concentration of the embedded fluorescent material; i.e. ceria nanoparticles. This emission is due to the synthesized ceria nanoparticles optical tri-valiant cerium ions ce(3+), associated with formed oxygen vacancies with a direct allowed bandgap around 3.5 eV. Optical characteristics such as fluorescence emission intensity, absorbance dispersion, and direct bandgap are presented besides structural characteristics such as FTIR spectroscopy, and SEM analysis. The synthesized optical nanocomposite could be helpful in many further applications such as bio-imaging, biomedical engineering, and environmental optical sensors.