Green biosynthesized nanoparticles have a bright future because they can be produced using a method that is more energy-efficient, cost-effective, repeatable, and environmentally friendly than physical or chemical synthesis. In this study, silver nanoparticles (AgNPs) were produced using the Fusarium nygamai isolate AJTYC1. Several techniques were used to characterize the synthesized AgNPs, including UV–Vis spectroscopy, transmission electron microscope, zeta potential analysis, X-ray diffraction analysis, energy dispersive X-ray, and Fourier transform-infrared spectroscopy. AgNPs showed a distinctive surface plasmon resonance (SPR) peak in the UV–visible range at 310 nm. The morphology of the biosynthesized AgNPs was spherical, and the TEM image shows that they ranged in size from 27.3 to 53.1 nm. The notable peaks of the FT-IR results show the different groups for the alkane, alkynes, cyclic alkenes, carboxylic, aromatic amine, esters, and phenolics. Additionally, the results showed that AgNPs had superior antioxidant activity when compared to ascorbic acid and butylated hydroxytoluene, which is a powerful antioxidant. Additionally, AgNPs have antibacterial action utilizing agar diffusion against gram-positive bacteria, gram-negative bacteria, and antifungal activity. AgNPs’ anticancer activity varied depending on the type of cancer it was used to treat, including hepatocellular cancer (HepG2), colorectal carcinoma (HCT116), and breast cancer of the mammary gland (MCF7). The viability of the cancer cell lines was reduced with increasing AgNP concentration. AgNPs also demonstrated promising photocatalytic activity by reducing methylene blue, safranin, crystal violet, and green malachite by 88.3%, 81.5%, 76.4%, and 78.2%, respectively. In addition, AgNPs significantly affected the Allium cepa plant’s mitotic index and resulted in chromosomal abnormalities as compared to the control. Thus, the synthesized AgNPs demonstrated an efficient, eco-friendly, and sustainable method for decolorizing dyes as well as antioxidant, antibacterial, antifungal, and anticancer activities. This could be a huge victory in the fight against numerous dynamic diseases and lessen wastewater dye contamination.