One-step chemical reduction approach is developed to synthesize nearly monodispersed Ag-Au alloy nanoparticles stabilized by CTAB molecules. By controlling the molar ratios of Ag(I) and Au(III), the surface plasmon resonance (SPR) band of alloy nanoparticles observe between 410 and 530 nm, which are the absorption maxima of silver and gold nanoparticles, respectively. The transmission electron microscope (TEM) shows that the obtained alloy nanoparticles are spherical in shape having size from 12 to 17 nm which provides high catalytic activity towards hydrogenation reactions. The catalytic efficiency of Ag NPs are less compared to pure Au NPs, whereas their activity can be modulated in between these two by appropriately controlling their molar ratio in the resultant Ag-Au alloy NPs. Moreover, with regards to high stability and recyclability, Ag-Au alloy NPs shows ~ 100% conversion efficiency up to five consecutive reaction cycles while monometallic nanoparticle are incapable. Thus, it is possible to modulate and enhance the catalytic activity of Ag NPs by making an alloy with Au NPs of desired composition.