In recent years, nanotechnology has received extraordinary attention as the demands of today’s modern lifestyle are actively changing every day. The need for a sustainable environment and process is the prerequisite today for any advancement. Nanoparticles and its application have extended its wings into various fields. Researchers across the globe are constantly exploring the applications of NPs, especially those of metallic NPs. Among the metallic NPs, silver NPs has received special attention owing to their excellent physical and chemical properties. Nanobiotechnology has opened avenues for such a sustainable and environment-friendly progress. So, in this review, we have summarized the different methods employed in synthesising AgNPs, with special focus on the biological synthesis. This approach is of importance because of its advantages such as use of nontoxic compounds, inexpensive process, and high stability of products obtained in comparison to the other approaches. Several biomolecules of interest such as microbes and plant extracts that are used for synthesis are discussed in detail. The recent advancements in the environmental application of these biologically synthesised NPs include remediation of heavy metals and sensing, as catalysts in toxic dye degradation, remediation of waste water, and also, as a pesticidal agent for crop protection. Although AgNPs have been used in several sectors of research and industries, relevance to the environment is prominent owing to the impact it makes on the humans and all forms of life on earth.