In this study, we present the synthesis and characterization of AgNPs using Drymaria cordata along with an assessment of their antioxidant, antibacterial, and antidiabetic activities. Antibacterial activities using four bacterial strains, free radical scavenging assays (DPPH and ABTS), and carbohydrate hydrolyzing enzyme inhibition assays were done to examine the therapeutic efficacy of AgNPs. Additionally, herein, we also evaluated the biocompatibility of the AgNPs using hemoglobin (Hb) as a model protein. A comprehensive analysis of Hb and AgNP interactions was carried out by using various spectroscopic, imaging, and size determination studies. Spectroscopic results showed that the secondary structure of Hb was not altered after its interaction with AgNPs. Furthermore, the thermal stability was also well maintained at different concentrations of nanoparticles. This study demonstrated a low-cost, quick, and eco-friendly method for developing AgNPs using D. cordata, and the biocompatible nature of AgNPs was also established. D. cordata-mediated AgNPs have potential applications against bacteria and diabetes and may be utilized for targeted drug delivery.