Surface-modified sulfur nanoparticles (SNPs) of two different sizes were prepared via a modified liquid-phase precipitation method, using sodium polysulfide and ammonium polysulfide as starting material and polyethylene glycol-400 (PEG-400) as the surface stabilizing agent. Surface topology, size distribution, surface modification of SNPs with PEG-400, quantitative analysis for the presence of sulfur in nanoformulations, and thermal stability of SNPs were determined by atomic force microscopy (AFM), dynamic light scattering (DLS) plus high-resolution transmission electron microscopy (HR-TEM), fourier transform infrared (FT-IR) spectroscopy, energy dispersive X-ray (EDX) spectroscopy, and thermogravimetric analysis (TGA), respectively. A simultaneous study with micron-sized sulfur (S-0) and SNPs was carried out to evaluate their fungicidal efficacy against Aspergillus niger and Fusarium oxysporum in terms of radial growth, sporulation, ultrastructural modifications, and phospholipid content of the fungal strains using a modified poisoned food technique, spore-germination slide bioassay, environmental scanning electron microscopy (ESEM), and spectrometry. SNPs expressed promising inhibitory effect on fungal growth and sporulation and also significantly reduced phospholipid content.