The present study deals with the synthesis of ZnO and Ag‐ZnO nanoparticles using Excoecaria agallocha leaf extract under a controlled ultrasound cavitation technique. The characterization of the as‐synthesized ZnO and Ag‐ZnO nanoparticles (different molar concentration of Ag) were subjected to Fourier transform infrared spectroscopy (FTIR), X‐ray diffraction analysis (XRD), UV‐Visible Diffuse reflectance spectroscopy (UV‐Vis DRS), Thermogravimetric analysis (TGA), N2 adsorption‐desorption isotherm (BET), scanning electron microscopy(SEM) and transmission electron microscopy (TEM). The photocatalytic performance of ZnO and Ag‐ZnO nanoparticles as catalysts were studied for hazardous organic dyes such as methylene blue (MB) and rhodamine‐B (Rh−B) under solar light irradiation. The degradation study follows pseudo‐first‐order kinetics. The effective degradation of MB was found to be 56.44 % (ZnO nanoparticles) and 98.44 % Ag‐ZnO nanoparticles, respectively at 100 min at the molar ratio (0.25 : 1). Whereas, Rh−B shows 27.50 % (ZnO nanoparticles) and 98.83 % at the same molar ratio of Ag‐ZnO nanoparticles at 80 min. Among the as‐synthesized nanoparticles, Ag‐ZnO at molar ratio 0.25 : 1 shows effective photocatalytic activity. Besides these as‐synthesized nanoparticles exhibited good antimicrobial activity with an increase in Ag nanoparticles decorated into ZnO. A similar trend was observed in antioxidant and anti‐inflammatory activity.