The objective of this study was to evaluate the effect of an embedded bio-nano hybrid system using nanoscale zinc oxide (n-ZnO) and lindane-degrading yeast Candida VITJzN04 for lindane degradation. Nano-embedding of the yeast was done with chemically synthesized n-ZnO particles (50 mg/mL) and was visualized by atomic force microscope (AFM) and scanning electron microscope (SEM). Nanoparticles were embedded substantially on the surfaces of the yeast cells and translocated into the cell cytoplasm without causing any lethal effect to the cell until 50 mg/mL. Lindane (600 mg/L) degradation was studied both in the individual and hybrid system. Rapid reductive-dechlorination of lindane was attained with n-ZnO under illuminated conditions, with the generation of chlorobenzene and benzene as dechlorination products. The bio-nano hybrid was found to be more effective compared to the native yeasts for lindane degradation and resulted in complete removal within 3 days. The kinetic data analysis implied that the half-life of lindane was 9 h for bio-nano hybrid and 28 h for Candida VITJzN04. The enhanced lindane degradation by bio-nano hybrid might be due to increased porosity and permeability of the yeast cell membrane, facilitating the easy entry of lindane into cell cytoplasm and n-ZnO-mediated dechlorination. To the best of our knowledge, this report, for the first time, suggests the use of n-ZnO-mediated dechlorination of lindane and the novel bio-nano hybrid system that reduces the half-life to one third of the time taken by the yeast alone. The embedded bio-nano hybrid system may be exploited as an effective remediation tool for the treatment of lindane-contaminated wastewaters.