The recent advent of conductive and biodegradable materials has opened enormous opportunities for biosensor applications and contributed to the elimination of major environmental and food wastes by decreasing the volume of electronic waste. Here, we aim to develop biosensors with electrically conductive and biodegradable composite materials and characterize their electrical, thermal, and biodegradable properties. A solvent casting and situ oxidative synthesis method were adopted to synthesize novel activated biochar (ABC) and polylactic acid (PLA) with AgNPs to prepare the conductive and biodegradable composite materials for biosensor applications. The obtained AgNP/ABC/PLA composite was electrically characterized via cyclic voltammetry (CV) and differential plus voltammetry (DPV), and results revealed that the peak current increased from 0.4 to 1.3 mA for CV and 0.6 to 0.9 mA for DPV. The developed ABC/PLA films were composted, and results showed that weight loss of ABC/PLA composite film effectively occurred over 10 weeks of biodegradation from ∼9% to ∼48.7%. The biosensor developed with AgNP/ABC/PLA composite revealed that the fabricated biosensor increased its sensing performance to detect ammonia (NH3) over the range of 5–60 ppm. The results indicate that biosensor fabrication with AgNPs/ABC/PLA composite is promising, offering the potential to detect ammonia in food, agricultural, and environmental application.