Objective To synthesize the silver nanoparticles (AgNPs) using the extracts of Hypnea sp . and to investigate the antibacterial activity against Eshcherichia coli , Staphylococcus aureus and invitro cytotoxic activity on HT-29. Methods In the present study, AgNPs were synthesized using the aqueous extract of marine macro-algae, and were characterized using UV-visible spectroscopy, Fourrier Transform Infra red (FT-IR) spectroscopy, X-ray diffraction (XRD) analysis and Transmission Electron Microscopy (TEM) analysis. Further these synthesized AgNPs were evaluated for their antibacterial activity with the clinical isolates from wound specimens. The isolates were characterized by different tests viz., microscopical observation, colony morphology, biochemical & sugar fermentation tests. The synthesized AgNPs were tested for its antibacterial activity against the isolates by agar well diffussion method. The AgNPs were assessesd for its cytotoxic activity on Human Caucasian colon adenocarcinoma (HT-29) cell lines. Results In this study, it is clear that the synthesized AgNPs were spherical measuring 10–20nm and was found to be more bactericidal against Gram-negative bacteria ( E. coli ) than Gram-positive bacteria ( Staphylococcus aureus ) isolated from wound specimen. The invitro screening of the AgNPs showed potential cytotoxic activity against the colon cancer cell lines. Conclusions Proteins can bind to nanoparticles either through the electrostatic attraction of negatively charged carboxylate groups in Hypnea sp . and stabilization of the AgNPs by protein occurs. The antimicrobial activities of AgNPs are influenced by the dimensions of the particles the smaller the particles, the greater antimicrobial effect. The cytotoxic activity may be due to the presence of alkaloids present in the Hypnea sp .