In the present study, Ag/AgCl‐NPs were biosynthesised using Hypnea musciformis seaweed extract; NPs synthesis was confirmed by a change of colour and observation of a razor‐sharp peak at 424 nm by UV–visible spectroscopy. Synthesised nanoparticles were characterised by transmission electron microscopy, energy‐dispersive X‐ray spectroscopy, X‐ray powder diffraction and Fourier transform infrared spectroscopy. Bacterial cell growth inhibition proves that the Ag/AgCl‐NPs have strong antibacterial activity and cell morphological alteration was observed in treated bacterial cells using propidium iodide (PI). Ag/AgCl‐NPs inhibited Ehrlich ascites carcinoma (EAC) cells, colorectal cancer (HCT‐116) and breast cancer (MCF‐7) cell line in vitro with the IC50 values of 40.45, 24.08 and 36.95 μg/ml, respectively. Initiation of apoptosis in HCT‐116 and MCF‐7 cells was confirmed using PI, FITC‐annexin V and Hoechst 33342 dye. No reaction oxygen species generation was observed in both treated and untreated cell lines. A significant increase of ATG‐5 gene expression indicates the possibility of autophagy cell death besides apoptosis in MCF‐7 cells. The initiation of apoptosis in EAC cells was confirmed by observing caspase‐3 protein expression. Ag/AgCl‐NPs inhibited 22.83% and 51% of the EAC cell growth in vivo in mice when administered 1.5 and 3.0 mg/kg/day (i.p.), respectively, for 5 consequent days.