The present study deals with the preparation and optimisation of neem oil nanoemulsion by microfluidization process and its application for the bacterial infection management in aquaculture. The effect of process parameters like surfactant concentration (Tween 20, Tween 80), homogenisation pressure and the number of cycles on the droplet size of neem oil nanoemulsion was investigated. The optimized pressure and number of cycles for the neem oil nanoemulsion preparation was found to be 20,000 psi and 25 cycles respectively. A significant decrease (p < 0.05) in the particle size of neem oil nanoemulsion was observed as the pressure, number of cycles and concentration of surfactant increase. The neem oil nanoemulsion prepared using 1:3 ratio of neem oil and Tween 80 surfactant showed a good stability with a mean droplet size of 24.5 ± 1.33 nm. The concentration of Azadiractin, an active ingredient in neem oil nanoemulsion was found to be 21.187 ± 1.01 μg/mL. The 1:3 ratio of neem oil - Tween 80 formulated nanoemulsion showed good antibacterial activity against the fish pathogen, Aeromonas culicicola (MIC of 0.93 μl/mL). The morphological changes inflicted by the neem nanoemulsion treatment on bacterial cells were evident from the scanning electron microscopy and membrane integrity analysis. Further, the In-vivo bactericidal efficacy of the neem oil nanoemulsion was tested on Common carp (Cyprinus carpio). The neem oil nanoemulsion treatment exhibited protective action against Aeromonas culicicola infection and it improved the antioxidant defence system of fish. The above results envisage the use of neem oil nanoemulsion as a potential alternative for synthetic antibiotics in treatment of bacterial infection of the fish. Copyright © 2018 John Wiley & Sons, Ltd.