Indigofera linifolia is a medicinally important plant, and by virtue of its rich phytochemical composition, this plant is widely used as essential component in traditional medication systems. Due to its wide range of medicinal applications, the extract-loaded chitosan (Ext+Ch), extract-loaded PEG (Ext+PEG), and extract-loaded locust bean gum (Ext+LGB) nanoparticles (NPs) were prepared in the present study. The prepared NPs were then evaluated for their antibacterial, antioxidant, and antidiabetic potentials. Antibacterial activities of the crude extract and the synthesized NPs were performed following standard procedures reported in the literature. The antioxidant capabilities of extract and NPs were evaluated using DPPH free radical scavenging assay. The antidiabetic potential of the samples was evaluated against α-amylase and α-glucosidase. Ext+PEG NPs showed more potent antibacterial activity against the selected strains of bacteria with the highest activity against Escherichia coli. The lowest antibacterial potential was observed for Ext+LGB NPs. The Ext+LGB NPs IC50 value of 39 μg/mL was found to be the most potent inhibitor of DPPH free radicals. Ext+LGB NPs showed a greater extent of inhibition against α-glucosidase and α-amylase with an IC50 of 83 and 78 μg/mL, whereas for the standard acarbose the IC50 values recorded against the mentioned enzymes were 69 and 74 μg/mL, respectively. A high concentration of phenolics and flavonoids in the crude extract was confirmed through TPC and TFC tests, HPLC profiling, and GC–MS analysis. It was considered that the observed antibacterial, antidiabetic, and antioxidant potential might be due the presence of these phenolics and flavonoids detected. The plant could thus be considered as a potential candidate to be used as a remedy of the mentioned health complications. However, further research in this regard is needed to isolate the exact responsible compounds of the observed biological potentials exhibited by the crude extract. Further, toxicity and pharmacological evaluations in animal models are also needed to establish the safety or toxicity profile of the plant.