AbstractGreen synthesis of silver nanoparticles (AgNPs) by using diverse plant extracts has gained significance for applications in biomedical sciences and engineering. However, no studies have been done on the synthesis of AgNPs using the extract of Flaxseed peel (FsP) (Linumusitatissimum L), an eco‐friendly agricultural waste. The present study reports the green synthesis of poly (vinyl alcohol) (PVA) ‐ silver nanoparticles (PVA‐AgNPs) composite 1 using the aqueous extract of Flaxseed peel (FsP) (Linumusitatissimum L). GC‐MS, 1H NMR and FT‐IR spectral analyses were performed to understand the phytochemical basis of nanoparticle formation. The obtained AgNPs in the composite were characterized using a variety of techniques including FT‐IR, UV‐visible spectroscopy, HR‐TEM along with EDX spectroscopy, SEM, and DLS. UV‐vis analysis revealed a prominent surface plasmon resonance band at 422 nm, confirming the formation of AgNPs. TEM technique revealed the presence of nearly spherical AgNPs with an average size of 11.28 nm. PVA‐AgNPs composite 1 exhibited antibacterial activity against Gram‐positive Staphylococcus aureus and Gram‐negative Escherichia coli. Furthermore, a dose‐time dependent cytotoxic effect against L929 fibroblast cells was demonstrated by the nanocomposite. Thus, present findings provided a basis of FsP‐extract mediated green synthesis of PVA‐AgNPs composite 1 suggesting functional nanomaterial of biomedical potentialities.