Dermatophytosis is a prevalent fungal infection and public health burden, majorly caused by the attack of zoophilic fungi genera of Trichophyton and Microsporum. Among them, T. mentagrophytes and M. canis are the dominating pathogens that cause dermatophytosis in humans. Though anti‐fungal treatments are available, the widespread drug resistance and minimal efficacy of conventional therapies cause recurring infections. In addition, prolonged anti‐fungal medications induce several systemic side effects, including hepatotoxicity and leucopenia. The anti‐dermatophytic formulation of biocompatible essential oil components (EOCs) is attractive due to their highly potent anti‐dermatophytic action. Herein, two EOCs, Eugenol (EU) and Isoeugenol (IU), incorporated emulsion hydrogel (EOCs‐EHG) synthesized from hydroxypropylmethyl cellulose and poly(ethylene glycol) methyl ether methacrylate. The cytocompatibility of the hydrogels is confirmed by treating them with fibroblast and keratinocyte cell lines. The EOCs‐EHG demonstrated pH and temperature‐responsive sustained release of entrapped EOCs and inhibited fungal spore germination. T. mentagrophytes and M. canis biofilms are eradicated at a minimal inhibitory concentration of 2 µg mL−1 each of EU and IU. The in vivo anti‐dermatophytic activity of EOCs‐EHG is confirmed in dermatophyte‐infected Wistar albino rat models. The topical application of EOCs‐EHG demonstrated complete infection eradication and facilitated skin regeneration, emphasizing the therapeutic potential of EOCs‐EHG against dermatophytosis.