In the green approach for nanoparticle synthesis, biomolecules like phenols, alkaloids, proteins, enzymes, and lipids are the prime reducing and stabilizing agents. In this study, we reported the synthesis of silver nanoparticles (AgNPs) using the aqueous extract of the marine algae Iyengaria stellata (Børgesen) for the first time. The characterization study showed that the developed AgNPs were spherical in shape and their average particle size was 60 nm. The UV–visible spectrum of AgNPs showed strong surface plasmon resonance (SPR) near 425 nm, whereas the Fourier transform infrared spectroscopy (FTIR) spectrum revealed the presence of several functional groups like amines, nitriles, hydroxyl, and carbonyl groups on the nanoparticle surface, which confirms the involvement of algal metabolites in the reduction and stabilization of AgNPs. The X‐ray diffraction (XRD) analysis provided information about the crystallinity of developed nanoparticles, and the crystallite size of AgNPs was calculated to be 33 nm using the Scherrer equation. The algal synthesized AgNPs examined for their impact on growth of tomato seeds under salt stressed conditions showed significant enhancement in growth parameters like leaf area, shoot height, root length, shoot weight, and root weight. Also, a reduction in biochemical stress responses such as chlorophyll content, relative water content, electrolyte leakage, hydrogen peroxide (H2O2) content, glycine betaine content, and proline content was seen. This study suggests that algal synthesized AgNPs can reduce the effect of salt stress in tomato plants and promote their overall growth.