Paclobutrazol (PBZ), a fungicide widely used as growth regulator in plants, is often detected in surface waters, posing potential risks to aquatic life. While its toxicity in adult fish is known, effects on early-life stages remain underexplored. The study evaluated the effect of PBZ on zebrafish (Danio rerio) embryos/larvae and the potential protective role of zinc-doped cadmium sulphide nanoparticles (Zn-CdS NPs) synthesized using Hypsizygus ulmarius mushroom extract. Embryos/larvae were exposed to PBZ (0.01 μg L-1), Zn-Cds (10 μg L-1), and PBZ + Zn-Cds (0.01 μg L-1+10 μg L-1) and maintaining control group at 24, 48, 72, and 96 h post fertilization (hpf). PBZ exposure induced several abnormalities, including pericardial and yolk sac edema, reduced yolk sac extension and scoliosis. Co-treatment with Zn-CdS NPs reduced these effects, although some malformations like short tail and pericardial edema persisted. Embryos treated with Zn-CdS NPs alone showed no morphological defects. PBZ significantly decreased hatching and heart rates, as well as protein levels and antioxidant enzyme activities (SOD and CAT), with partial improvement observed in the PBZ + Zn-CdS group. Particularly, Zn-CdS NPs alone did not alter these parameters. Overall, PBZ is toxic to zebrafish early-life stages, while Zn-CdS NPs appear safe and can mitigate PBZ-induced toxicity. These findings suggest Zn-CdS NPs synthesized via mushroom extract are eco-friendly and may warrant further investigation as toxicity-mitigating agents in environmental applications.