In the present study, selenium nanoparticles were synthesized in situ on alkali-activated cotton fabric using guava leaf extract as a reducing agent. The synthesis was monitored by a change in color of fabric from white to light brick red. The UV-DRS analysis confirms the coating of Se NPs on cotton. The XRD, FT-IR, and SEM-EDX characterization techniques were used to analyze the nanoparticles on cotton fabric. The peak at 788 cm−1 in FT-IR confirms the formation of Se NPs on cotton fabric. The XRD analysis confirms that the average crystallite size of as-prepared nanoparticle is ~17 nm. SEM-EDX analysis shows the successful coating of Se NPs on coated fabric. ICP-OES studies confirm 3.65 mg/g of selenium nanoparticles were present on the fabric. The Se-coated-30 showed a larger zone of inhibition against Gram-positive S. aureus (32 mm) compared to Gram-negative strains of E. coli (16 mm) and K. pneumoniae (26 mm). The fabric was also tested against the fungi C. glabrata (45 mm), C. tropicalis (35 mm), and C. albicans (35 mm) and results indicate it is more effective against fungal compared to bacterial strains. The coated fabric inhibits biofilm formation of C. albicans (99%), S. aureus (78%), and E. coli (58%). The results demonstrated excellent antibacterial, antifungal, and antibiofilm activities of the Se-coated-30. The prepared fabric has the potential to be used in medicinal applications and is both ecofriendly and cost effective.