Silver nanoparticles (AgNPs) prepared through biological means have gained tremendous emphasis particularly, for biomedical applications. In this study, biogenic production of AgNPs was carried out using the fungus Penicillium camemberti MTCC 418. The synthesis was confirmed by color change, UV-Vis spectroscopy, X-ray diffraction (XRD), field emission scanning electron microscopy (FESEM), energy-dispersive X-ray technique (EDX), and Fourier transform infrared spectroscopy (FTIR). A sharp peak at 435 nm confirmed the synthesis of nano-silver by reduction of precursor metal ions by extracellular fungal extract metabolites. The crystalline nature of the AgNPs was confirmed by XRD analysis, found to be 18.73 nm. FESEM analysis revealed spherical to irregularly shaped AgNPs. Amino acids, proteins, and heterocyclic compounds were the main functional groups involved in the bioreduction of silver ions which were confirmed by the FT-IR technique. Further, the NPs showed significant antibacterial, antioxidant, lipid peroxidation inhibition, anti-diabetic, and anti-inflammatory potential. The biofabricated AgNPs demonstrated a remarkable zone of inhibition against gram-negative Escherichia coli (17.9 mm) and gram-positive Staphylococcus aureus (23.8 mm). The DPPH experiment revealed that the AgNPs had shown 84.25 +/- 1.86% of free radical scavenging activity with IC50 of 272.5 +/- 3 mu g/mL and strong anti-inflammatory activity with 82.94 +/- 4.9% and 80.01 +/- 0.52% against the BSA and Hens' albumin, respectively. The antidiabetic assay revealed that these AgNPs had an IC50 for alpha-amylase of 325.72 +/- 3 mu g/mL and inhibited lipid peroxidation by 83.27 +/- 9.18%. The acute nanotoxicity studies against Daphnia magna (EC (50) = 16.9 mg/L) showed the effect of myco-synthesized AgNPs on the aquatic organism.