The Azadirachta indica is an excellent and pharmaceutically valuable phytochemicals enriched traditional medicinal plant. The purpose of the research was to assess the ability of A. indica aqueous kernel extract to synthesize silver nanoparticles as well as their anti-inflammatory and anti-diabetic activity in vitro. The obtained results state that the aqueous kernel extract of A. indica can fabricate the silver nanoparticles and be confirmed by standard analytical techniques. Under UV–visible spectrophotometer analysis, the absorbance peak was found at 430 nm was related to the surface plasmon resonance of silver nanoparticles. The FTIR (Fourier-transform infrared spectroscopy) analysis revealed that numbers of functional groups belong to the pharmaceutically valuable phytochemicals, which act as reducing, capping, and stabilizing agent on silver nanoparticles synthesis. The size and shape of the silver nanoparticles were examined as 19.27–22.15 nm and spherical in shape. Interestingly, this kernel fabricated silver nanoparticles possess a reasonable anti-inflammatory (69.77%) and anti-diabetic (73.5%) activity at 100 μg mL−1 and these were partially comparable with standards (anti-inflammatory: 81.15%; anti-diabetic: 87.9%). Thus, the aqueous kernel extract fabricated silver nanoparticles can be considered for further in-vivo study to assess the practical possibility to promote as a pharmaceutical agent.