In this work we aim to manipulate green route for the synthesis of core-shell maghemite-based Ag nanoparticles functionalized with chitosan. Three fungal species, Aspergillus deflectus, Fusarium oxysporum, and Penicillium pinophilum, were used in the process of synthesis to select the best among them for the production. The physicochemical parameters of produced nanoparticles and mediated cytotoxicity assessment for their potential medical application have been performed using Fourier transform infrared (FTIR), UV/visible, vibrating sample magnetometer (VSM), dynamic light scattering (DLS), high-resolution transmission electron microscope (HRTEM), EDAX, and MTT to plot a cytotoxicity assessment report. The results confirmed the formation of monodispersed γFe2O3@Ag@chitosan with low cytotoxicity against prostate (PC3), liver (HepG2), column (HCT116), and breast cancer (MCF7) ATCC cell lines. In conclusion, these results prove the success of the green route used for the biosynthesis of γFe2O3@Ag@chitosan with parameters necessary for bioimaging, drug and gene delivery, and biosensing.