The current research has involved to develop nanoparticles (NPs) of zinc oxide (ZnO) doped with silver (Ag) through an eco-friendly method. Eclipta prostrate (EP), Eclipta alba (EA), and Tridax procumbans (TP) are subjected to Soxhlet extraction using ethyl acetate. Alkaloids, flavonoids, and phenols were quantified using standard methods. Polyherbal extract was used to synthesize silver-zinc oxide nanocomposites (Ag-ZnO NCs) via the sol-gel method. The reduction of metal ions was confirmed by UV–visible spectroscopy, scanning electron microscopy, and thermogravimetric analysis. Polyherbal plants are found to have higher concentrations of phenols, flavonoids, and alkaloids than indigenous plants. Ag-ZnO NCs functional group has been identified using Fourier Transform Infrared Spectroscopy (FTIR) spectroscopy. UV–vis spectroscopy revealed the surface plasmon resonance (SPR) of silver nanoparticles at 463–477 nm and zinc oxide nanoparticles at 266–267 nm. For Ag-ZnO NCs, the SPR peak was observed at 450 nm. Scanning electron microscopy confirmed the spherical morphology of the Ag-ZnO NCs. The anti-microbial activity of the formulated Ag-ZnO NCs was more effective than the extract against all tested pathogens. The most effective antimicrobial activities are achieved for Ag-ZnO NCs at 50 µg and 200 µg for extract. Biosynthesized nanoparticles exhibit a significant anti-inflammatory effect of 68% at a low concentration of 500 µg/mL, greater than the efficacy of diclofenac sodium. Additionally, the synthesized Ag-ZnO nanoparticle demonstrated its stability for 90 days and showed strong antimicrobial properties.