Silver nanoparticles (Ag NPs) via green synthesis using medicinal plants have been widely used in natural product research due to the economical and eco‐friendly properties of NPs. The plant‐derived Ag NPs biosynthesis comprises the interaction between silver nitrate (precursor) and bioactive components of plant extract (reducing agents). In this work, Ag NPs were biosynthesized using Osbeckia stellata leaves aqueous extract. Characterization of Ag NPs was done by using ultraviolet–visible absorption (UV–Vis) spectroscopy, dynamic light scattering (DLS), Fourier transform infrared spectroscopy (FTIR), X‐ray powder diffraction (XRD), scanning electron microscopy (SEM), transmission electron microscopy (TEM), and energy‐dispersive X‐ray analysis (EDX). Further, antioxidant, antidiabetic, cytotoxicity, and antimicrobial activities were evaluated to establish the pharmacological properties of Ag NPs. UV–Vis spectroscopy and FTIR showed an absorption peak of Ag NPs due to the surface plasmonic resonance. In contrast, the particle size in the nanometer range was analyzed by XRD and DLS. The size of the particle was confirmed by the SEM, TEM, and EDX in the nanometer range. This study showed the spherical shape and crystalline nature of NPs. Zeta potential was used to determine the stability of Ag NPs. Biosynthesized Ag NPs showed significantly potent antioxidant, antidiabetic, and cytotoxicity activity. Ag NPs also showed effectiveness against gram‐positive (Escherichia coli) and gram‐negative (Staphylococcus aureus) bacteria in the antimicrobial activity study. The result concluded that these Ag NPs might be used in biomedical and pharmacological fields.