Increase in bacterial resistance to commonly used antibiotics is a major public health concern generating interest in novel antibacterial treatments. Aim of this scientific endeavor was to find an alternative efficient antibacterial agent from non-conventional plant source for human health applications. We used an eco-friendly approach for phyto-fabrication of silver nanoparticles (AgNPs) by utilizing logging residue from timber trees Gmelina arborea (GA). GC–MS analysis of leaves, barks, flowers, fruits, and roots was conducted to determine the bioactive compounds. Biosynthesis, morphological and structural characterization of GA-AgNPs were undertaken by UV–Vis spectroscopy, scanning electron microscopy (SEM), energy-dispersive spectroscopy (EDX), transmission electron microscopy (TEM), Fourier transform infrared spectroscopy (FTIR) and X-ray diffractometer (XRD). GA-AgNPs were evaluated for antibacterial, antibiofilm, antioxidant, wound healing properties and their toxicity studies were carried out. Results identified the presence of terpenoids, sterols, aliphatic alcohols, aldehydes, and flavonoids in leaves, making leaf extract the ideal choice for phyto-fabrication of silver nanoparticles. The synthesis of GA-AgNPs was confirmed by dark brown colored colloidal solution and spectral absorption peak at 420 nm. Spherical, uniformly dispersed, crystalline GA-AgNPs were 34–40 nm in diameter and stable in solutions at room temperature. Functional groups attributed to the presence of flavonoids, terpenoids, and phenols that acted as reducing and capping agents. Antibacterial potency was confirmed against pathogenic bacteria Bacillus cereus, Escherichia coli, Pseudomonas aeruginosa, and Staphylococcus aureus by disc diffusion assay, MIC and MBC assay, biofilm inhibition assay, electron-microscopy, cell staining and colony counting techniques. The results from zone of inhibition, number of ruptured cells and dead-cell-count analysis confirmed that GA-AgNPs were more effective than GA-extract and their bacteria inhibition activity level increased further when loaded on hydrogel as GA-AgNPs-PF127, making it a novel distinguishing feature. Antioxidant activity was confirmed by the free radical scavenging assays (DPPH and ABTS). Wound healing potential was confirmed by cell scratch assay in human dermal fibroblast cell lines. Cell-proliferation study in human chang liver cell lines and optical microscopic observations confirmed non-toxicity of GA-AgNPs at low doses. Our study concluded that biosynthesized GA-AgNPs had enhanced antibacterial, antibiofilm, antioxidant, and wound healing properties.