In this study, a ceramic membrane using kaolin (40% w/w) as a primary precursor was fabricated by the uniaxial dry compaction technique at a sintering temperature of 900 °C (as negligible weight loss >850 °C) and functionalized by bioinspired Ag nanoparticles (AgNPs) synthesized using Sechium edule extract for the treatment of sewage water. The Ag+ adsorption of 99% on the bare membrane was achieved at pH 7. The X-ray diffraction pattern not only confirmed significant phase transformations during the sintering operation but also the presence of highly crystalline AgNPs in the modified membrane. UV-Vis spectroscopic analysis was used to study AgNPs formation based on surface plasmon effect, if any, on the modified membrane surface. AgNPs modified membrane showed a 60.5% decrease in surface area compared to bare membrane due to AgNPs impregnation. AgNPs (average size 29.54 nm) exhibited a uniform morphological distribution on the modified membrane, which decreased its average pore size and porosity from 3.09 to 2.64 µm and 47.91–44.97%, respectively. The pure water flux of bare and AgNPs modified membranes were 8.1 ± 0.09 × 10−4 and 6.33 ± 0.12 × 10−4 m3.m−2.s−1, respectively. The antimicrobial activity of bare membrane against E. coli, S. aureus, and bacterial strains in sewage water was found to be 37.03 ± 2.73, 52.64 ± 3.49, and 53.03 ± 6.80%, respectively. AgNPs functionalized ceramic membrane could completely (∼100%) inhibit the growth of E. coli, S. aureus, and bacterial strains in sewage water during filtration.