Amphotericin B (AMB) is commonly used to treat life-threatening systemic fungal infections. AMB formulations that are more efficient and less nephrotoxic are currently unmet needs. In the current study, new ZnO-PEGylated AMB (ZnO-AMB-PEG) nanoparticles (NPs) were synthesized and their antifungal effects on the Candida spp. were investigated. The size and zeta potential values of AMB-PEG and ZnO-AMB-PEG NPs were 216.2 ± 26.9 to 662.3 ± 24.7 nm and −11.8 ± 2.02 to −14.2 ± 0.94 mV, respectively. The FTIR, XRD, and EDX spectra indicated that the PEG-enclosed AMB was capped by ZnO, and SEM images revealed the ZnO distribution on the surface NPs. In comparison to ZnO-AMB NPs and free AMB against C.albicans and C.neoformans, ZnO-AMB-PEG NPs significantly reduced the MIC and MFC. After a week of single and multiple dosage, the toxicity was investigated utilizing in vitro blood hemolysis, in vivo nephrotoxicity, and hepatic functions. ZnO-AMB-PEG significantly lowered WBC count and hematocrit concentrations when compared to AMB and ZnO-AMB. RBC count and hemoglobulin content, on the other hand, were unaltered. ZnO-AMB-PEG considerably lowered creatinine and blood urea nitrogen (BUN) levels when compared to AMB and ZnO-AMB. The difference in liver function indicators was determined to be minor by all formulae. These findings imply that ZnO-AMB-PEG could be utilized in the clinic with little nephrotoxicity, although more research is needed to determine the formulation’s in vivo efficacy.