The emergence of multidrug-resistant (MDR) bacterial pathogens, particularly Acinetobacter baumannii, has necessitated the development of novel antimicrobial strategies. Endolysins, which are bacteriophage-derived peptidoglycan hydrolases, have shown promise as alternative therapeutics against antibiotic-resistant bacteria. The endolysin AbLys1 from A. baumannii phage TZA1 belongs to the glycoside hydrolase family 24 (GH24) and displays high selectivity and bacteriolytic activity against the Gram-negative A. baumannii. In this study, an engineered form of AbLys1 was obtained by fusion with an antimicrobial α-helical decapeptide. Compared to the wild-type enzyme, the engineered enzyme exhibited enhanced lytic activity against A. baumannii and showed lytic activity against a broader panel of bacterial species, including Enterococcus and Staphylococcus, as well as Salmonella sp., Klebsiella oxytoca and Escherichia coli, with activity levels varying among strains. In addition, the enzyme exhibited activity against plant pathogens, such as Pseudomonas syringae and several Xanthomonas strains. The enzyme was encapsulated in an alginate gel matrix (art-AbLys1-Alg), and its storage stability, bacteriolytic, and antibiofilm activities were investigated. Thermostability analysis revealed that the encapsulated enzyme exhibited a dramatic increase in stability, retaining >75% of its activity after 120 days at 4 °C. In addition, art-AbLys1-Alg showed an increased biofilm reduction ability for A. baumannii biofilm compared to the free enzymes. The findings of this study demonstrate that the combined strategy of antimicrobial peptide (AMP) fusion and alginate encapsulation significantly enhances the functionality and practical applicability of AbLys1 in diverse biomedical and environmental contexts.