Silver nanoparticles (AgNPs) are applied in various fields from electronics to biomedical applications as a result of their high surface-to-volume ratio. Even though different approaches are available for synthesis of AgNPs, a nontoxic method for the synthesis has not yet been developed. Thus, this study focused on developing an easy and ecofriendly approach to synthesize AgNPs using Azotobacter vinelandii culture extracts. The biosynthesized nanoparticles were further characterized by ultraviolet–visible (UV–Vis) spectroscopy, x-ray diffraction (XRD), Fourier transform infrared (FTIR), energy-dispersive spectrum, particle size distribution (PSD), and transmission electron microscopy (TEM). UV absorption noticed at 435 nm showed formation of AgNPs. The XRD pattern showed a face-centered cubic structure with broad peaks of ~28.2°, ~32.6°, ~46.6°, ~55.2°, ~57.9°, and ~67.8°. The FTIR confirmed the involvement of various functional groups in the biosynthesis of AgNPs. The PSD and TEM analyses showed spherical, well-distributed nanoparticles with an average size of 20–70 nm. The elemental studies confirmed the existence of pure AgNPs. The bacterial extract containing extracellular enzyme nitrate reductase converted silver nitrate into AgNPs. AgNPs significantly inhibited the growth of pathogenic bacteria such as Streptomyces fradiae (National Collection of Industrial Microorganisms (NCIM) 2419), Staphylococcus aureus (NCIM 2127), Escherichia coli (NCIM 2065), and Serratia marcescens (NCIM 2919). In addition, biosynthesized AgNPs were found to possess strong antioxidant activity. Thus, the results of this study revealed that biosynthesized AgNPs could serve as a lead in the development of nanomedicine.