Green synthesis of nanoparticles by using different biological agents has emerged as an alternative to overcome the toxic effect of chemically synthesized nanoparticles. Among various biological agents, plants are mostly preferred. This study describes an eco-friendly and green synthesis of silver nanoparticles (G-AgNPs) using Azadirachta indica (neem) as a reducing agent. UV–Vis spectral analysis proved the wavelength of sample to be 420 nm, approaching the surface resonance peak specific for G-AgNPs. Dynamic light scattering (DLS) analysis showed the mean diameter of particles as 35.4 nm with zeta potential +34.6 mV. TEM results revealed the compact and spherical shape of the particles. Fourier transform infrared spectroscopies (FT-IR) demonstrate the presence of possible functional groups involved in synthesis of the silver nanoparticles. The functional activity of immunological parameters, such as nitroblue tetrazolium assay, myeloperoxidase activity, phagocytic activity, anti-protease and lysozyme activity, increased significantly (P < 0.05) in fish treated with G-AgNPs. Relative percentage survival (74%) and enhanced disease resistance were observed in G-AgNP-treated Cirrhinus mrigala fingerlings challenged with Aeromonas hydrophila. In summary, present results demonstrate biosynthesized silver nanoparticles have immunomodulatory and antibacterial activity.