Penicillium italicum (P. italicum) can cause significant economic loss of fruits and vegetables. Although garlic oil (GO) is an effective antimicrobial agent, the unstability and hydrophobicity limit its use as an environmentally friendly alternative to the conventional antibiotics against P. italicum. In this study, we focused on the fabrication and characterization of a functional GO nanoemulsion (NE) using ultrasonic technique and revealed the antifungal mechanism of the GO NE on P. italicum based on morphological, structural and molecular analyses. The optimal hydrophilic lipophilic balance (HLB) value determined for GO was 14 through the combination of Tween 80 and Span 80. Then the Box-Benhnken Design (BBD) was applied to produce the GO NE and the effects of different fabrication parameters on the particle size were evaluated. The optimal GO NE was selected with the GO concentration of 5.5%, the Smix concentration of 10%, the ultrasonic time of 5 min and the power of 50%. This GO NE had the smallest particle size of 52.27 nm, the best antifungal effect and the most stability. Furthermore, the antifungal mechanism of the GO NE on P. italicum was evaluated by extracellular conductivity, micro-Raman spectra, fluorescence imaging and scanning electron microscopy (SEM) imaging. The results presented that the GO NE retained the antifungal active ingredients. The fungal cell structure and morphology were malformed after treated with the GO NE and the lipids, nucleic acids and protein of P. italicum were destructed. Finally, the optimal GO NE was applied in vivo and P. italicum in citrus was successfully inhibited. It indicated that the optimal GO NE had the better antifungal activity against P. italicum than the pure GO. Besides, the minimum inhibitory concentration (MIC) of GO after preparing into the NE was changed from 3.7% to 0.01265% with about 300 times improvement of bioavailability. Therefore, the synthetic GO NE which promoted the bioavailability of GO was recommended as a promising alternative to inhibit P. italicum in vegetables and fruits.