Hydrogels represent a versatile class of materials with remarkable potential as three-dimensional matrices for nanoparticle integration. This study explores the mechanism of silver nanoparticle formation within a polyacrylamide–alginate hybrid hydrogel, employing a controlled reduction–oxidation reaction between silver nitrate (AgNO₃) and sodium borohydride (NaBH₄) across a temperature gradient (5–70 °C). Characterization techniques, including Raman, infrared, and UV-Vis spectroscopies, X-ray diffraction, and scanning electron microscopy, were employed to analyze the structural and optical properties of the nanoparticles and the hydrogel. The results show that, as the temperature rose, nanoparticle numbers decreased, while their size increased. Consistently octahedral in shape and averaging 100–120 nm, these nanoparticles revealed a temperature-dependent growth pattern, with rare larger crystals emerging more frequently at higher temperatures. The findings highlight the potential of hybrid hydrogels as effective matrices for the incorporation of metal nanoparticles, paving the way for applications in drug delivery, biosensing, and antimicrobial treatments.