An endophytic strain of Streptomyces antimycoticus L-1 was isolated from healthy medicinal plant leaves of Mentha longifolia L. and used for the green synthesis of silver nanoparticles (Ag-NPs), through the use of secreted enzymes and proteins. UV–vis spectroscopy, Fourier-transform infrared (FT-IR), transmission electron microscopy (TEM), X-ray diffraction (XRD), and dynamic light scattering (DLS) analyses of the Ag-NPs were carried out. The XRD, TEM, and FT-IR analysis results demonstrated the successful biosynthesis of crystalline, spherical Ag-NPs with a particle size of 13–40 nm. Further, the stability of the Ag-NPs was assessed by detecting the surface Plasmon resonance (SPR) at 415 nm for one month or by measuring the NPs surface charge (−19.2 mV) by zeta potential analysis (ζ). The green-synthesized Ag-NPs exhibited broad-spectrum antibacterial activity at different concentrations (6.25–100 ppm) against the pathogens Staphylococcus aureus, Bacillus subtilis Pseudomonas aeruginosa, Escherichia coli, and Salmonella typhimurium with a clear inhibition zone ranging from (9.5 ± 0.4) nm to (21.7 ± 1.0) mm. Furthermore, the green-synthesized Ag-NPs displayed high efficacy against the Caco-2 cancerous cell line (the half maximal inhibitory concentration (IC50) = 5.7 ± 0.2 ppm). With respect to antibacterial and in-vitro cytotoxicity analyses, the Ag-NPs concentration of 100 ppm was selected as a safe dose for loading onto cotton fabrics. The scanning electron microscopy connected with energy-dispersive X-ray spectroscopy (SEM-EDX) for the nano-finished fabrics showed the distribution of Ag-NPs as 2% of the total fabric elements. Moreover, the nano-finished fabrics exhibited more activity against pathogenic Gram-positive and Gram-negative bacteria, even after 10 washing cycles, indicating the stability of the treated fabrics.