This study aimed to produce and optimize a Cordyceps militaris-based oil-in-water (O/W) nanoemulsion (NE) encapsulated in sea buckthorn oil (SBT) using an ultrasonication process. Herein, a nonionic surfactant (Tween 80) and chitosan cosurfactant were used as emulsifying agents. The Cordyceps nanoemulsion (COR-NE) was characterized using Fourier-transform infrared spectroscopy (FT-IR), dynamic light scattering (DLS), and field-emission transmission electron microscope (FE-TEM). The DLS analyses revealed that the NE droplets were 87.0 ±, 2.1 nm in diameter, with a PDI value of 0.089 ±, 0.023, and zeta potential of &minus, 26.20 ±, 2. The small size, low PDI, and stable zeta potential highlighted the excellent stability of the NE. The NE was tested for stability under different temperature (4°, C, 25°, C, and 60 °, C) and storage conditions for 3 months where 4 °, C did not affect the stability. Finally, in vitro cytotoxicity and anti-inflammatory activity were assessed. The results suggested that the NE was not toxic to RAW 264.7 or HaCaT (human keratinocyte) cell lines at up to 100 µ, L/mL. Anti-inflammatory activity in liposaccharides (LPS)-induced RAW 264.7 cells was evident at 50 µ, g/mL and showed inhibition of NO production and downregulation of pro-inflammatory gene expression. Further, the NE exhibited good antioxidant (2.96 ±, 0.10 mg/mL) activity and inhibited E. coli and S. aureus bacterial growth. Overall, the COR-NE had greater efficacy than the free extract and added significant value for future biomedical and cosmetics applications.