The present study describes the production of hybrid biopolymer hydrogel supported Ag NPs in a sustainable manner, along with its biological investigations and characterizations. A composite hydrogel of chitosan and Arabic gum (CS-AG) was utilized as the support or template for the green synthesis of nanoparticles. By taking advantage of their electron-rich organo-functions, the biopolymers could function as both an encapsulating stabilizer of the Ag NPs and a green-metric reductant of the incoming Ag ions. The physicochemical properties of the material were evaluated using an array of advanced analytical techniques like X-ray diffraction (XRD), elemental mapping, scanning electron microscopy (SEM), transmission electron microscopy (TEM), energy dispersive X-ray spectroscopy (EDX), Fourier Transformed Infrared Spectroscopy (FT-IR), UV-Vis spectroscopy and Inductively Coupled Plasma Optical Emission Spectroscopy (ICP-OES). Towards the biological implication, the material was used in anticancer studies against HT-29 and Caco-2 colon cancer cell lines using the MTT (3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide)colorimetric method, as well as in the biological evaluation of antioxidant properties by the DPPH (2,2-diphenyl-1-picrylhydrazyl)method. The substance appeared to have strong anticancer properties based on the DPPH assay's noteworthy IC50 value. Remarkably, it was discovered that the percentage of malignant cell lines' cell viability decreased over the Ag NPs@CS-AG nanocomposite in a dose-dependent manner. The MTT assay produced the corresponding IC50 values against the two cell lines, which were 366.1 μg/mL and 264.5 μg/mL, respectively. At 545 nm, the absorbance rate was assessed, showing toxicity on normal cell line (CHO) up to 1927 μg/mL, which was quite insignificant.