This study reports the synthesis of MnO₂‐based Zn (5%)‐doped Bi₂O₃ nanocomposites via coprecipitation, highlighting significant improvements in photocatalytic and antimicrobial properties. XRD confirmed the tetragonal β‐Bi₂O₃ phase with reduced crystallite size postdoping, while FESEM showed spherical particles of 8.61 nm. A decreased band gap of 2.61 eV and defect‐related PL emissions were observed, enhancing photocatalytic activity. The material demonstrated 92.4% and 99.50% efficiency for methylene blue (MB) and rhodamine B (Rh.B) degradation under sunlight, outperforming undoped Bi₂O₃. The I–V plots revealed reduced electrical resistance and increased photosensitivity (8.58%), indicating potential in optoelectronic applications. Antifungal tests showed inhibition zones of 16 and 11 mm against Fusarium and Aspergillus, respectively. Compared to previous studies, this work offers improved photocatalytic and antifungal performance, attributed to the reduced crystalline size, increased surface area, and enhanced defect formation, positioning it as a promising material for environmental and biomedical applications.