Silver and silver-cobalt bimetallic nanoparticles were prepared by chemical reduction method. Further the above nanoparticles with naproxen-β-cyclodextrin inclusion complex in solution phase as well as solid phase were analysed by UV–Visible, fluorescence, FTIR, Differential Scanning Colorimeter, XRD, SEM and TEM. Spectral, antibacterial and computational results for all the system have been reported and characterized to find out the stability of the system. UV–visible absorption spectra showed surface plasmon absorption maxima at 420 and 405 nm for silver and silver/cobalt nanoparticles respectively. In the presence of NP-β-CD inclusion complex, a blue shifted absorption maximum observed for silver and silver/cobalt nanoparticles indicate that, nanoparticles were encapsulated in the CD cavity.