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Application of synthetic fungicides in agricultural commodities has been restricted due to development of fungicide resistance fungi and deleterious impact on environment and health of farm animals and humans. Hence, there is an urge for development of mycobiocides, and the present study was undertaken to determine the antifungal activity of <i>Cymbopogon martinii</i> essential oil (CMEO) on post-harvest pathogen <i>Fusarium graminearum</i>. The CMEO was extracted by hydrodistillation and GC-MS chemical profile revealed the presence of 46 compounds and abundant was geraniol (19.06%). The minimum inhibitory concentration and minimum fungicidal concentration of CMEO were determined as 421.7 ± 27.14 and 618.3 ± 79.35 ppm, respectively. The scanning electron microscopic observation of CMEO exposed macroconidia was exhibited a detrimental morphology with vesicles, craters, protuberance, and rough surfaces related to control fungi. The CMEO induced the death of fungi through elevating intracellular reactive oxygen species and lipid peroxidation, and depleting ergosterol content. Regrettably, essential oils are highly volatile and become unstable and lose their biological features on exposure to light, heat, pH, moisture, and oxygen. To overcome these issues, chitosan encapsulated CMEO nanoparticles (Ce-CMEO-NPs) were prepared. The synthesized Ce-CMEO-NPs have spherical morphology with Zeta potential of 39.3-37.2 mV and their corresponding size was found in range of 455-480 nm. The Fourier transform infrared analysis confirmed that bio-active constituents of CMEO were well stabilized due to chitosan conjugation and successfully formed Ce-CMEO-NPs. The <i>in vitro</i> release assay observed that the release of CMEO is stabilized due to the complex formation with chitosan and thereby, increases the lifetime antifungal activity of CMEO by gradual release of antifungal constituents of Ce-CMEO-NPs. In conclusion, antifungal and antimycotoxin activities of CMEO and Ce-CMEO-NPs against <i>F. graminearum</i> were assessed in maize grains under laboratory conditions over a storage period of 28 days. Interestingly, Ce-CMEO-NPs were presented efficient and enhanced antifungal and antimycotoxin activities related to CMEO, and it could be due to perseverance of antifungal activity by controlled release of antifungal constituents from Ce-CMEO-NPs. The study concluded that Ce-CMEO-NPs could be highly appropriate as mycobiocides in safeguarding the agricultural commodities during storage period in agricultural and food industries.