In the present study silver nanoparticles (AgNPs) were successfully synthesized using aqueous extract of sea weed, Gracilaria corticata. The aqueous callus extract (5%) treated with 1 mM silver nitrate solution resulted in the formation of AgNPs and the surface plasmon resonance (SPR) of the formed AgNPs was recorded at 405 nm using UV-Visible spectrophotometer. The molecules involved in the formation of AgNPs were identified by Fourier transform infrared spectroscopy (FT-IR), surface morphology was studied by using scanning electron microscopy (SEM), and X-ray diffraction spectroscopy (XRD) was used to determine the crystalline structure. SEM micrograph clearly revealed the size of the AgNPs was in the range of 20–55 nm with spherical, hexagonal in shape and poly-dispersed nature. High positive Zeta potential (22.9 mV) of formed AgNPs indicates the stability and XRD pattern revealed the crystal structure of the AgNPs by showing the Bragg’s peaks corresponding to (111), (200), (220) planes of face-centered cubic crystal phase of silver. The synthesized AgNPs exhibited effective anticancerous activity (at doses 6.25 and 12.5 µg/ml of AgNPs) against human hepatic carcinoma cell line (HepG2).