Here we describe a simple, novel method of zinc oxide nanoparticle (ZNP) synthesis and physicochemical characterization. The dose-dependent antifungal effect of ZNPs, compared to that of micronized zinc oxide (MZnO), was studied on two pathogenic fungi: Aspergillus niger and Fusarium oxysporum. Superoxide dismutase (SOD) activity, ascorbate peroxidase activity, catalase activity, glutathione reductase (GR) activity, thiol content, lipid peroxidation, and proline content in ZNP-treated fungal samples were found to be elevated in comparison to the control, which strongly suggested that the antifungal effect of ZNPs was due to the generation of reactive oxygen species (ROS). Protein carbonylation, another marker of oxidative stress, was also evaluated by the dinitrophenyl hydrazine (DNPH) binding assay and Fourier transform infrared (FTIR) spectral analysis followed by Western blot and microarray analysis of fungal samples to confirm ROS generation by ZNPs. Micrographic studies for the morphological analysis of fungal samples (ZNP-treated and a control) exhibited an alteration in fungal morphology. The bioavailability of ZNPs on fungal cell was confirmed by energy-dispersive X-ray (EDX) analysis followed by high-resolution transmission electron microscopy (HR-TEM) and confocal microscopic analysis of the fungal samples. In vivo acute oral toxicity, acetylcholine esterase activity, and a fertility study using a mice model were also investigated for ZNPs. The long-term toxicity of ZNPs through intravenous injection was evaluated and compared to that of MZnO. The in vitro comparative toxicity of ZNPs and MZnO was evaluated on MRC-5 cells with the help of water-soluble tetrazolium (WST-1) and lactate dehydrogenase (LDH) assays. These results suggested that ZNPs could be used as an effective fungicide in modern medical and agricultural sciences.