The elimination of hazardous industrial pollutants from aqueous solutions is an emerging area of scientific research and a worldwide problem. An efficient catalyst, Ag–CuO was synthesized for the degradation of methylene blue, the chemical sensing of ammonia. A simple novel synthetic method was reported in which new plant material Capparis decidua was used for the reduction and stabilization of the synthesized nanocatalyst. A Varying amount of Ag was doped into CuO to optimize the best catalyst that met the required objectives. Through this, the Ag–CuO nanocomposite was characterized by XRD, SEM, HR-TEM, EDX, and FTIR techniques. The mechanism of increased catalytic activity with Ag doping involves the formation of charge sink and suppression of drop back probability of charge from conduction to valance band. Herein, 2.7 mol % Ag–CuO exhibited better catalytic activities and it was used through subsequent catalytic experiments. The experimental conditions such as pH, catalyst dose, analyte initial concentration, and contact time were optimized. The as-synthesized nanocomposite demonstrates an excellent degradation efficacy of MB which is 97% at pH 9. More interestingly, the as-synthesized catalyst was successfully applied for the chemical sensing of ammonia even at very low concentrations. The lower limit of detection (LLOD) also called analytic sensitivity was calculated for ammonia sensing and found to be 1.37 ppm.