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Silver nanoparticles (AgNPs) are a promising technology for the design of antimicrobial agents against drug-resistant pathogens. It could also be used for the photocatalytic degradation of dyes used in industries such as methylene blue (MB). In this study, 17 different actinomycetal strains isolated from hydrocarbon-contaminated soils collected from an oil distribution company in Algeria were evaluated for their ability to produce NPs. After a selection process, S16 was the main strain capable of synthesizing AgNPs extracellularly. The strain S16 was determined using molecular identification based on the sequencing of the 16S rDNA gene. Among various techniques used for the synthesis of AgNPS, a technique using a temperature of 30 °C, pH of 7, a metal salt concentration of 1 mM, and a period of 72 h in the dark were found to be more effective in the biosynthesis of the AgNPs. The biosynthesized AgNPs that were analyzed by UV–visible spectroscopy resulted in a specific peak at a wavelength of (λ = 400 nm). The DRX analyses showed characteristic peaks of the AgNPs at (1 1 1), (2 0 0), (2 2 2), and (3 1 1), which validated the presence and crystalline nature of the biosynthesized NPs. Zetasizer analysis showed an average size and zeta potential of 64 nm (−32.3 mV), while the SEM-EDS analysis confirmed the spherical shape of AgNPs and the presence of Ag atoms in the elemental composition. The biosynthesized AgNPs indicated adequate antibacterial activity against 5 out of the 6 strains tested in this study, using minimum inhibitory concentration (MIC) that ranged from 217.18 μg/mL to 1137.5 μg/mL. The AgNPs were combined with commercial antibiotics and the synergistic effect of the combination was also assessed against MRSA which resulted in increased antibacterial activity of AgNPs in the presence of the strain S16. Furthermore, the photocatalytic degradation of the methylene blue (MB) was evaluated under sunlight and UV irradiations using biosynthesized AgNPs. The AgNPs showed photocatalytic decolorization potential of 71.3% for MB dye (20 ppm) under sunlight irradiation within 6 h of incubation, while only 11.25% of the MB dye degraded using UV irradiation. • Seventeen different actinomycetal strains were tested to produce nanoparticles. • S16 strain was well able to synthesize Ag nanoparticles extracellularly. • The antibacterial efficacy was enhanced in the presence of AgNPs of the S16 strain. • The AgNPs nanoparticles succeeded in the photocatalytic degradation of MB dye. [ABSTRACT FROM AUTHOR]