Cucumber mosaic virus (CMV) causes a significant threat to crop output sustainability and human nutrition worldwide, since it is one of the most prevalent plant viruses infecting most kinds of plants. Nowadays, different types of nanomaterials are applied as a control agent against different phytopathogens. However, their effects against viral infections are still limited. In the current study, the antiviral activities of the biosynthesized silver nanoparticles (Ag-NPs) mediated by aqueous extract of Ocimum basilicum against cucumber mosaic virus in squash (Cucurbita pepo L.) were investigated. The prepared Ag-NPs were characterized using scanning electron microscopy (SEM), dynamic light scattering (DLS), transmission electron microscopy (TEM), energy-dispersive X-ray spectroscopy (EDX), Fourier transform infrared spectroscopy (FTIR) and zeta potential distribution techniques. DLS, SEM, and TEM analyses showed that the Ag-NPs were spherical, with sizes ranging from 26.3 to 83 nm with an average particle size of about 32.6 nm. FTIR identified different functional groups responsible for the capping and stability of Ag-NPs. The zeta potential was reported as being −11.1 mV. Under greenhouse conditions, foliar sprays of Ag-NPs (100 µg/mL) promoted growth, delayed disease symptom development, and significantly reduced CMV accumulation levels of treated plants compared to non-treated plants. Treatment with Ag-NPs 24 h before or after CMV infection reduced CMV accumulation levels by 92% and 86%, respectively. There was also a significant increase in total soluble carbohydrates, free radical scavenging activity, antioxidant enzymes (PPO, SOD, and POX), as well as total phenolic and flavonoid content. Furthermore, systemic resistance was induced by significantly increasing the expression levels of pathogenesis-related genes (PR-1 and PR-5) and polyphenolic pathway genes (HCT and CHI). These findings suggest that Ag-NPs produced by O. basilicum could be used as an elicitor agent and as a control agent in the induction and management of plant viral infections.