The preparation of zinc oxide and silver doped zinc oxide nanoparticles using zinc nitrates and silver nitrates as oxidizers and Azadirachta indica gum as a fuel via solution combustion method at 500 °C. The synthesized nanoparticles were characterized by XRD, FTIR, UV-DRS, SEM and TEM studies; these materials were tested for photoluminescence and photocatalytic activity studies. The PXRD data indicated that the synthesized nanoparticles confirmed as hexagonal phase with average crystallite size of 13.33 and 13.34 nm for ZnO and Ag-ZnO respectively. The SEM data revealed that, the material obtained is highly porous and honeycomb like structure. In the photocatalytic degradation of methylene blue, Ag-ZnO nanoparticles have shown the good photocatalytic activity than undoped ZnO nanoparticles. This is due to the presence of Ag on the surface of ZnO catalyst makes the catalyst more sensitive to light and reduce the electron hole recombination. Furthermore, we have also examined the photoluminescence studies for the synthesized materials and it has given the green emission by excitation at 380 nm. In this study, the green synthesis method will produces large quantity of nanomaterials with less time and low cost.