A facile, template free innovative and inexpensive route based on the biogenic method has been demonstrated for the synthesis of AgNPs decorated on ZnO nanorods. The as-synthesized Ag–ZnO nanorods have been characterized by a host of different techniques such as X-ray diffraction, diffuse reflectance spectroscopy, transmission electron microscopy, Fourier transform infrared spectroscopy, energy dispersive spectroscopy and photoluminescence. The sunlight-induced photocatalytic feature of Ag–ZnO nanorods was verified towords the degradation of Methyl Orange and Acid Green-25. The cytotoxicological test indicate that toxicity of photocatalytically degraded products were significantly reduced as compared to original dyes. Also antimicrobial studies against Pseudomonas aurogenosa (NCIM 5032) and Bacillus Subtilis (NCIM 2635), were evaluated. The Ag–ZnO nanorods have exhibited an excellent sunlight-induced photocatalytic degradation of dyes compared to pristine ZnO. The experimental results suggest that sunlight induced photocatalytic activity is favoured due to extension of the optical response from UV to visible and suppression of recombination of photogenerated electrons and holes.