Tea tree oil (TTO) is a natural plant essential oil that has strong bactericidal properties and low toxicity. However, owing to its irritability, volatility, instability under light/oxygen and hydrophobicity, the application of TTO in pharmaceutical production technology and the food industry is limited. To overcome these problems, TTO nanoemulsions (TTONs) were prepared using a high-speed shearing method. The mean droplets size of TTON was measured. TTON droplets were observed using confocal laser scanning microscopy and analysed using a Turbiscan scanning spectrum. The most suitable nanoemulsion formula was obtained as follows: TTO content, 10% (w/w); Tw-40 content, 8% (w/w); deionised water content, 82% (w/w); shearing time, 5 minutes. The antibacterial effect of TTON was studied, and it was found that its antibacterial activity against Escherichia coli was more potent than that against Staphylococcus aureus. The antibacterial mechanism of TTON was also investigated by observing bacterial morphology using scanning electron microscopy and testing the levels of bacterial reactive oxygen species. The effect of TTON on L-02 cells was evaluated. The results showed that the cell survival rates of L-02 cells treated with TTON at 0.05-0.25 μg/μL were all >90%. At each concentration, the total apoptosis rate of L-02 cells was <10%. These results indicated the high biocompatibility and biological safety of TTON. Therefore, the preparation of TTO into a nanoemulsion can improve its bioavailability, which has positive implications for further applications of TTO.