The influence of homogenization conditions on selected essential oil (thyme, lemongrass, cinnamon, peppermint, and clove)-in-water nanoemulsion formation and stability was investigated. Physically stable essential oil nanoemulsions could be fabricated by a microfludizer under optimized processing conditions (10,000 psi and 2 passes). The chemical compositions of EOs was characterized using GC–MS. The antifungal activity and mycotoxin inhibitory activity of essential oils in both bulk and nanoemulsion forms were determined using two isolates of Fusarium graminearum. The major chemical components of essential oil had a remarkable impact on long term physical stability, antifungal activity, and inhibition of mycotoxin production. With regard to inhibition of mycotoxin production, the mycotoxin inhibitory activity of essential oils was enhanced considerably in nanoemulsion form, which was attributed to greater solubility of the essential oils. It was also noted that the same essential oils exhibited significant differences in inhibition of mycotoxin production in the two isolates of F. graminearum.