The growing global population drives increased food demand, impacting the global packaging materials sector, leading to the development of active packaging to enhance food quality, shelf life, and safety. Proper packaging materials, with improved antibacterial and antioxidant barriers, are becoming important in the food sector to reduce food loss and contamination. This study uses Egyptian basil Ocimum basilicum L manufacturing wastes as a biowaste, an agro-industry waste, as a reducing and capping agent to biosynthesize silver nanoparticles (AgNPs). Then, different contents from AgNPs (0.5, 2, 4 wt%) were entrapped into polyurethane nanofiber (PUNFs) to enhance the antimicrobial and antioxidant properties. Gas chromatography/mass spectrometry (GC/MS) was employed to analyze the chemical constituents present in the aqueous peel extract of Ocimum basilicum L. The physicochemical properties of AgNPs before and after entrapped nanofibers were investigated, their antimicrobial and antioxidant properties were evaluated. As a result of the distinctive surface plasmon resonance properties exhibited by Ag (metallic nanoparticles), there are notable peaks observed at 272.5 nm and a prominent peak at 467.3 nm. TEM analyses indicated that the AgNPs were consistently round and uniform, measuring an average of 17.16 ± 1.94 nm in diameter; SEM also confirmed these findings. AgNPs were found to possess their typical crystalline structure, as evidenced by the results of XRD and TEM analyses. The rise in nanofiber diameter is responsible for the escalated AgNP concentration. The presence of AgNPs and Ocimum basilicum L biowaste significantly enhanced the antibacterial and antioxidant properties compared to pure TPU.