Background – The synthesis of gold nanoparticles (GNPs) using drugs, synthetic and natural compounds, proteins, nucleic acids have become beneficial due to improved biological activity coupled with reduced cytotoxicity. In this regard, green synthesis of GNPs using plant extract enriched with flavonoids has shown increased attention due to improved antimicrobial efficacy, greater solubility, and better bioavailability of the flavonoid conjugated with GNPs. We have used 7, 8 dihydroxyflavone (DHF), a flavonoid that is enriched in plants and known for neurotropic and antioxidant activities, for the synthesis of GNP. In this report, we have investigated the synthesis, characterization, and biological activity of DHF synthesized GNP against the parasite Leishmania donovani. Results – Synthesized DHF functionalized GNPs (DHF-GNPs) are ~35 nm in size with zeta potential values of -34.1 mV, as observed from DLS studies. UV-Visible spectroscopy and FT-IR analysis confirm successful conjugation of DHF over GNP. TEM imaging shows the uniform size and spherical distribution of NPs. Against L. donovani promastigotes IC50 for DHF and DHF-GNP is ~120 µM and ~40 µM respectively. In ex vivo, amastigote model IC50 for DHF and DHF-GNP is ~40 µM and ~22 µM respectively. A dose-dependent increase of gold content as measured by atomic absorption spectroscopy (AAS) confirms the internalization of GNPs by macrophages. Even with 1000 µM of DHF-GNP, cytotoxicity is only ~30% compared to ~50% cytotoxicity of 40 µM c-GNP, on THP1 cells. It indicates high biocompatibility of DHF-GNP over c-GNP. In DHF-GNP treated parasites, the activity of arginase decreases in a dose-dependent manner as evident from gene expression and enzyme-based studies. Supplementation of treated cells with ornithine, metabolite of arginase, shows the highest recovery from death. This indicates inhibition of arginase as the main reason for parasite death. Induction of IFN-γ and reduction IL-12 cytokine response shows a possible Th1/Th2-mediated cell death. Also, DHF and DHF-GNP are equally effective against sensitive and drug-resistant strains of L. donovani. Conclusion – Low cytotoxicity and high biological activity may provide an alternative but improved delivery of DHF whose solubility increases due to conjugation with GNP. Further efficacy against drug-resistant strains could be beneficial instead of conventional chemotherapy for leishmaniasis.