The present investigation entails the fabrication and characterization of nanometric emulsion of eugenol (Nm-eugenol) encompassed into chitosan for assessing bio-efficacy in terms of in vitro antifungal actions, antiaflatoxigenic potential, and in situ preservative efficacy against Aspergillus flavus infestation and aflatoxin B (AFB ) mediated loss of dietary minerals, lipid triglycerides and alterations in composition of important macronutrients in stored rice. Nm-eugenol characterized by SEM, XRD, and FTIR exhibited biphasic burst release of eugenol. Reduction in ergosterol and methylglyoxal (AFB -inducer) content after Nm-eugenol fumigation depicted biochemical mechanism of antifungal and antiaflatoxigenic activities. In silico 3D homology docking of eugenol with Ver-1 gene validated molecular mechanism of AFB inhibition. Further, significant protection of rice seeds from fungi, AFB contamination and preservation against loss of rice minerals, macronutrients and lipids during storage suggested deployment of chitosan as a biocompatible wall material for eugenol encapsulation and application as novel green preservative for food protection.