Copper (II) oxide nanoparticles (CuO-NPs) have been studied as potential antimicrobial agents, similar to silver or platinum nanoparticles. However, the use of excess NPs is limited by their safety and toxicity in beneficial microflora and human cells. In this study, we evaluated the cytotoxicity of CuO-NPs by coating with a novel cyclic peptide, CuO binding peptide 1 (CuBP1), cyclic-SCATPFSPQVCS, which binds to the surface of CuO-NPs. CuBP1 was identified using biopanning of a T7 phage display system and was found to promote the aggregation of CuO-NPs under mild conditions. The treated CuO-NPs with CuBP1 caused the reduction of the cytotoxicity against Escherichia coli, Lactobacillus helveticus, and five other microorganisms, including bacteria and eukaryotes. Similar effects were also demonstrated against human embryonic kidney (HEK293) cells in vitro. Our findings suggested that the CuO-NPs coated with a surface-binding peptide may have applications as a safe antimicrobial agent without excessive cytotoxic activity against beneficial microflora and human cells. Moreover, a similar tendency may be achieved with other metal particles, such as silver or platinum NPs, by using optimal metal binding peptides.