In recent years, gold nanoparticles have emerged as promising agents for plasmonic sensing, photoacoustic imaging, photothermal therapy, and other biomedical applications. In this work, green synthesis of plant‐mediated gold nanoparticles (AuNPs) using an aqueous leaf extract of Pimenta dioica was carried out and the synthesized nanoparticles were characterized using X‐ray diffraction (XRD), ultraviolet‐visible (UV‐Vis) absorption spectroscopy, Fourier transform infra‐red (FTIR) spectroscopy, and electron microscopy. A plausible mechanism of the formation of gold nanoparticles from Pimenta dioica leaf extract was also proposed. Synthesized AuNPs were found to be safe for human cervical cancer (HeLa) and human embryonic kidney 293 (HEK 293) cell lines established using MTT (3‐(4,5‐dimethylthiozol‐2‐yl)‐2,5‐diphenyl tetrazolium bromide) assay. The potential of the synthesized nanoparticles for the plasmonic sensing of analyte molecule was carried out using the AuNPs as a surface‐enhanced Raman spectroscopy substrate. It was found that the AuNPs enhanced the Raman signal of analyte molecules with an enhancement factor of >105 in comparison to the normal Raman signal measured from the analyte, i. e., without nanoparticles. Further, the synthesized AuNPs showed excellent photoacoustic signal responses (PASR) and found to be the most efficient photoacoustic signal generators. The photothermal performance of these nanoparticles was also carried out. Overall, the findings of this study suggest that in future, these AuNPs could be used as a green alternative to conventionally used in‐vivo theranostic agents.