Nanopesticides such as nanopermethrin can serve as an alternative to conventional pesticides causing eco-toxicity. The nanoformulation of this pyrethroid pesticide was carried out by solvent evaporation of pesticide-loaded microemulsion. The Z average for the nanopermethrin dispersion in paddy field water was found to be 169.2 ± 0.75 nm with a polydispersity index of 0.371 that exhibits uniform dispersion. Further, the nanopermethrin (NP) dispersion exhibited an effective stability in the paddy field water for a duration of 48 h with a Z average of 177.3 ± 1.2 nm and a zeta potential of −30.7 ± 0.9 mV. The LC50 of the nanopermethrin against Culex tritaeniorhynchus in the field condition was found to be 0.051 μg/mL. In addition to the stability assessment, the biosafety of the nanopermethrin was commenced on the beneficial bacterial isolate Enterobacter ludwigii (VITSPR1) considered as plant growth-promoting rhizobacteria. The toxic effect of nanopesticide was compared to its bulk counterpart, i.e. bulk permethrin (BP) at a concentration of 100 µg/mL, and the nanopesticide was found to be potentially safe. The results of biomarker enzymatic assays (lipid peroxidase, glutathione reductase, lactate dehydrogenase) displayed insignificant (p < 0.05) toxicity of NP towards the bacterial cells compared to BP. The live–dead cell staining and SEM analysis illustrated negligible toxicity of NP towards the bacteria. The non-toxic behaviour of the NP towards the non-target species was studied which displayed the eco-safe property of NP. © 2016, Springer-Verlag Berlin Heidelberg.