The occurrence of pesticidal pollution in the environment and the resistance in the mosquito species makes an urge for the safer and an effective pesticide. Permethrin, a poorly water-soluble pyrethroid pesticide, was formulated into a hydrodispersible nanopowder through rapid solvent evaporation of pesticide-loaded oil in water microemulsion. Stability studies confirmed that the nanopermethrin dispersion was stable in paddy field water for 5 days with the mean particle sizes of 175.3 ± 0.75 nm and zeta potential of −30.6 ± 0.62 mV. The instability rate of the nanopermethrin particles was greater in alkaline (pH 10) medium when compared with the neutral (pH 7) and acidic (pH 4) dispersion medium. The colloidal dispersion at 45°C was found to be less stable compared with the dispersions at 25 and 5°C. The 12- and 24-h lethal indices (LC50) for nanopermethrin were found to be 0.057 and 0.014 mg l−1, respectively. These results were corroborative with the severity of damages observed in the mosquito larvae manifested in epithelial cells and the evacuation of the midgut contents. Further, the results were substantiated by the decrease in cellular biomolecules and biomarker enzyme activity in nanopermethrin treated larvae when compared to bulk and control treatment.