Currently, applications of essential oils for protection of postharvest fruits against fungal infestation and mycotoxin contamination are of immense interest and research hot spot in view of their natural origin and possibly being an alternative to hazardous synthetic preservatives. However, the practical applications of essential oils in broad-scale industrial sectors have some limitations due to their volatility, less solubility, hydrophobic nature, and easy oxidation in environmental conditions. Implementation of nanotechnology for efficient incorporation of essential oils into polymeric matrices is an emerging and novel strategy to extend its applicability by controlled release and to overcome its major limitations. Moreover, different nano-engineered structures (nanoemulsion, suspension, colloidal dispersion, and nanoparticles) developed by applying a variety of nanoencapsulation processes improved essential oil efficacy along with targeted delivery, maintaining the characteristics of food ingredients. Nanoemulsion-based edible coating of essential oils in fruits poses an innovative green alternative against fungal infestation and mycotoxin contamination. Encapsulation-based coating of essential oils also improves antifungal, antimycotoxigenic, and antioxidant properties, a prerequisite for long-term enhancement of fruit shelf life. Furthermore, emulsion-based coating of essential oil is also efficient in the protection of physicochemical characteristics, viz., firmness, titrable acidity, pH, weight loss, respiration rate, and total phenolic contents, along with maintenance of organoleptic attributes and nutritional qualities of stored fruits. Based on this scenario, the present article deals with the advancement in nanoencapsulation-based edible coating of essential oil with efficient utilization as a novel safe green preservative and develops a green insight into sustainable protection of fruits against fungal- and mycotoxin-mediated quality deterioration.