Nanoencapsulation is widely considered as a highly effective strategy to enhance essential oils’ (EO) stability by protecting them from oxidative deterioration and evaporation. The present study aims to optimize and characterize an efficient technique for encapsulating Cinnamomum (C.) verum essential oil into chitosan nanoparticles using response surface methodology (RSM). Moreover, the optimized C. verum EO nanoparticle was investigated for its antibacterial (against Gram-positive and Gram-negative bacteria), antifungal (against Candida albicans), and antiparasitic activity (against Leishmania parasites). Five parameters were investigated using a Plackett–Burman and Box–Behnken statistical design: the chitosan molecular weight, TPP concentration, C. verum EO/chitosan ratio, mixing method, and the duration of the reaction. Encapsulation efficiency and anti-candida activity were considered as responses. The antibacterial, anticandidal, and anti-leishmanial activities were also assessed using a standard micro-broth dilution assay and the cytotoxicity assay was assessed against the macrophage cell line RAW 264.7. The optimized nanoparticles were characterized using Fourier transform infrared spectroscopy, Zeta potential, and scanning electron microscopy. The study results indicated that under optimal conditions, the nanoencapsulation of C. verum EO into chitosan nanoparticles resulted in an encapsulation efficiency of 92.58%, with a regular distribution, a nanoparticle size of 480 ± 14.55 nm, and a favorable Zeta potential of 35.64 ± 1.37 mV. The optimized C. verum EO/chitosan nanoparticles showed strong antifungal activity against C. albicans pathogens (CMI = 125 µg mL⁻¹), notable antibacterial activity against both Gram-positive and Gram-negative bacteria (ranging from 125 to 250 µg mL⁻¹), high leishmanicidal potential against the promastigotes form of L. tropica and L. major (IC50 = 10.47 and 15.09 µg mL⁻¹, respectively), and a four-fold cytotoxicity reduction compared to non-encapsulated essential oil. These results suggest that C. verum EO-loaded chitosan nanoparticles could be a promising delivery system for the treatment of cutaneous Candida albicans infections.