The impact of the nanoparticles on the dyspepsia mice gut microbiota is evaluated through the utilization of the 16S rRNA technique. Various methods were employed to characterize the NPs. In the textile, culinary, paper, leather, and printing sectors, synthetic dyes are frequently employed as coloring agents. Because these dye molecules are harmful to both the environment and living things, it is difficult to remove them sustainably. Here, we have produced nanoparticles embedded in chitosan-polyvinyl alcohol hydrogel (CS-PVA) by using bark's Pistacia under ultrasonic irradiation. The reduction of Ag + ions into Ag0 NPs was detected by a visual change in the colors. UV–Vis analysis indicated that the characteristic SPR band appeared near ∼440–450 nm. UV/Vis, EDX-elemental mapping, SEM, TEM, ICP-OES, and XRD analysis were applied to characterize the Ag NPs/CS-PVA nanocomposite. The recent study focused on the cellular and molecular aspects. The MTT assay was conducted for 48 h to evaluate the anti-human gastric cancer and cytotoxicity efficacies of the treated cells with nanocomposite. The assessment was performed on normal (HUVEC) and gastric cancer cells, namely MKN45 and NCI–N87. The IC50 values of nanocomposite against MKN45 and NCI–N87 were 180 and 151 μg/mL, respectively. The dose-dependent reduction in malignant gastric cell viability was observed in the nanocomposite presence. Furthermore, the nanocomposite induced cell apoptosis by 40–50%, leading to an increase in the expression of pro-apoptotic markers (Bax and cleaved caspase-8) and a decrease in the expression of the anti-apoptotic marker, Bcl-2. Furthermore, the nanocomposite showed inhibitory effects on colony formation. Our results indicate that the nanocomposite can increase p53 expression and decrease the expression of STAT3 in treated cells. This indicates that p53 and STAT3 play crucial roles in the biological effects induced by the extract in human gastric carcinoma cells. The data from the gut microbiome suggested that nanocomposites have the ability to control the rebalancing of homeostasis and microbiome composition by decreasing the levels of harmful bacteria, and at the same time, increasing the levels of beneficial bacteria. Following the introduction of nanocomposite, there was an observed rise in the levels of gastrointestinal hormones in the serum, including gastrin and motilin, while the levels of vasoactive intestinal peptide decreased. The application of nanocomposite led to an improvement in gastrointestinal movement, encompassing a rise in the rate of transit through the small intestine and the rate of gastric emptying. These findings offer that the Ag NPs/CS-PVA nanocomposite could be a promising anticancer treatment for functional dyspepsia and gastric cancer.