Aims The use of cyanobacterial cell extracts for the synthesis of zinc oxide nanoparticles seems to be superior to other methods of synthesis as a green, environmentally friendly, and low-cost approach. In the present study, the cell extract of a newly characterized cyanobacterial strain Desertifilum sp. EAZ03 was used for the biosynthesis of zinc oxide nanoparticles. The antimicrobial, anti-biofilm, and anti-cancer activities of the biosynthesized ZnO NPs (hereinafter referred to as CED-ZnO NPs) were examined as well. Methods and Results The UV-Vis spectroscopy of the CED-ZnO NPs showed an absorbance band at 364 nm, and powder X-ray diffraction analysis confirmed the purity of the synthesized nanoparticles. The analysis of Scanning electron microscopy (SEM) and transmission electron microscopy (TEM) images revealed that CED-ZnO NPs are rod-shaped with a size of 88 nm. The study of the biological features of CED-ZnO NPs showed a significant antimicrobial potential against the bacterial strains tested. CED-ZnO NPs were able to impede the biofilm formation by S. aureus, E. coli, and P. aeruginosa up to 80%, 89%, and 85%, respectively. The nanoparticles also showed 69%, 70%, and 62% degrading activity against S. aureus, E. coli, and P. aeruginosa one-day-old biofilms, respectively. The anti-biofilm activity of the synthesized nanoparticles was investigated by confocal laser scanning microscopy (CLSM). MTT assay showed that the CED-ZnO NPs, at a concentration of 100 μg/ml, had less cytotoxicity towards normal lung (MRC-5) cells, at the half, compared to cancerous lung alveolar epithelial (A549) cells. The MIC (minimum inhibitory concentration) and MBC (minimum bactericidal concentration) values of CED-ZnO NPs against E. coli, P. aeruginosa, and S. aureus were 1500, 2000, 32 μg/ml, and 2500, 3500, 64 μg/ml, respectively. Conclusions The multifunctional CED-ZnO NPs seem promising for possible applications in the therapeutic and pharmaceutical industries. Significance and Impact of the Study The present study proposes a new approach for the biosynthesis of zinc oxide nanoparticles using a newly characterized cyanobacterial strain Desertifilum sp. EAZ03. The considerable antimicrobial, antibiofilm, and anticancer activities of the biosynthesized zinc oxide nanoparticles further emphasize the emerging role of microbial systems in the green synthesis of metal oxide nanoparticles.