Aflatoxin B1 (AFB1) is one of the most common unavoidable mycotoxins mainly produced by Asprgillus flavus and Aspergillus parasiticus. Its consumption of AFB1 contaminated food may cause severe negative health effects even at very low concentrations. The study explore the antifungal and aflatoxin B1 inhibitory efficacy of nanoencapsulated antifungal formulation (ZTC) based on the combination of Zingiber officinale (Z), Trachyspermum ammi (T), Coleus aromaticus (C), essential oils (Z:T:C at ratio 1:4:1) using mixture design assay. The formulation ZTC was chemically characterized through GC-MS to explore its chemical composition. The ZTC was encapsulated inside the chitosan nanomatrix with an average size 267 nm and characterized by Dynamic Light Scattering; Fourier transforms infrared spectroscopy, and X-ray diffraction assay. The results showed that the nanoencapsulated antifungal formulation (Ne-ZTC) causes complete inhibition of growth of toxigenic Aspergillus flavus and aflatoxin B1 secretion at 0.2µl/ml, which was lower than the free form of ZTC (0.40µl/ml and 0.30µl/ml). The antifungal and aflatoxin B1 inhibitory effects were explored and found to be related with impairment in membrane permeability, conidia formation, carbohydrate utilization, antioxidant defense, mitochondrial function, secondary metabolism, and AFB1 biosynthesis genes using in-silico, transcriptomic and molecular approaches. In-situ observation revealed that Ne-ZTC effectively protects the Avena sativa seeds from A. flavus and AFB1 contamination and preserves its sensory profile. The findings suggest that nanoencapsulated antifungal formulation (Ne-ZTC) has promising use in the food industries as a green antimicrobial agent against molds and aflatoxin B1 contamination to extend the shelf-life of food commodities.