This current study aims to develop a unique biomaterial that can fight against oxidative stress and microbial infections without causing any harm. As a result, an easy-to-make, environment-friendly, long-lasting, and non-toxic copper oxide nanoparticle (CuONP) was synthesized using an edible mushroom Pleurotus citrinopileatus extract. The UV–vis spectroscopy analyses reflected a sharp absorbance peak at 250 nm. The FTIR, XRD, SEM, HR-TEM, and EDX instrumental tools were used to characterize the myco-produced CuONPs. The face-centred cubic (FCC) CuONPs were found to have diffraction peaks at the planes of (110), (002), (111), (112), (020), (202), (113), (310), (220), and (004). The HR-TEM result showed the particles had a spherical structure and an average nanoparticles size of 20 nm. The antimicrobial activity results expressed the broad spectrum of antibacterial effect and the better growth inhibition zone was recorded in P. aeruginosa (8.3 ± 0.1), E. coli (7.4 ± 0.3), K. pneumoniae (7.2 ± 0.1), S. aureus (7.1 ± 0.3), S. pneumoniae (6.3 ± 0.2), and B. cereus (6.2 ± 0.3 mm). The cytotoxicity efficacy of myco-synthesized CuONPs tested against a cancer cell line (HT-29) observed the best result in low doses of mushroom extract (45.62 μg/mL). Based on the outcome of the study suggests that the mycosynthesized CuONPs using Pleurotus mushroom extract might serve as an alternative agent for biomedical applications in the near future.