Herbal extract–based silver nanoparticles (AgNPs) have emerged as a promising and sustainable alternative to conventional chemical and physical synthesis methods due to their eco-friendly, cost-effective, and biocompatible nature. In this green synthesis approach, plant-derived phytochemicals such as flavonoids, phenolics, terpenoids, alkaloids, proteins, and polysaccharides act as both reducing and stabilizing agents, facilitating the conversion of silver ions (Ag⁺) into metallic silver nanoparticles (Ag⁰) while preventing aggregation. The physicochemical properties of biosynthesized AgNPs—including size, morphology, crystallinity, and surface charge—are influenced by parameters such as pH, temperature, extract concentration, and reaction time, and are characterized using techniques like UV–visible spectroscopy, FTIR, TEM, SEM, XRD, DLS, and zeta potential analysis. Herbal AgNPs exhibit significant biological activities, including antibacterial, antifungal, antiviral, antioxidant, and anticancer effects, primarily through mechanisms involving membrane disruption, reactive oxygen species generation, DNA damage, and apoptosis induction. Beyond biomedical applications such as wound healing, drug delivery, and medical device coatings, these nanoparticles also demonstrate potential in agriculture and environmental remediation. Despite their advantages, concerns regarding toxicity, reproducibility, large-scale production, and regulatory approval remain challenges for clinical and industrial translation. Overall, herbal extract–based silver nanoparticles represent a vital convergence of green chemistry and nanotechnology with substantial potential for sustainable therapeutic and technological applications.