Antibiotics are successful in promoting health quality by preventing various infectious diseases and minimizing mortality and morbidity all over the world. However, the indiscriminate use of antibiotics has led to the emergence of multi-drug-resistant bacteria, which pose a serious threat to health care sector. Therefore, it is necessary to develop novel antimicrobial agents with versatile characteristics, such as antibacterial activity, low toxicity, wound healing potency, and antioxidant property. In this context, silver chitosan nanoparticles were synthesized in the present study, and their physical characterization revealed that the size of synthesized chitosan–silver nanoparticles was 14–25 nm, with positive surface charge. The functional groups and crystalline nature of the nanoparticles were confirmed by FT-IR and XRD analysis. Further, the silver chitosan nanoparticles showed antibacterial activity against two important clinical pathogens, S. aureus and E. coli. The MTT assay carried out in the present study showed that the synthesized nanoparticles are non-toxic to host cells. A scratch assay on fibroblast cells (L292) demonstrated that the silver chitosan nanoparticles showed promising wound healing activity. A fluorescent DCFH-DA staining assay revealed anantioxidant property of the synthesized nanoparticles. Overall, the study emphasizes the versatile nature of synthesized chitosan–silver nanoparticles, suggesting their great compatibility for biomedical applications.