In the present work, we describe a simple, cheap, and unexplored method for “green” synthesis of silver nanoparticles using cell extracts of the cyanobacterium Anabaena doliolum. An attempt was also made to test the antimicrobial and antitumor activities of the synthesized nanoparticles. Analytical techniques, namely UV-vis spectroscopy, X-ray diffraction, Fourier transform infrared (FTIR) spectroscopy, transmission electron microscopy (TEM), and TEMselected area electron diffraction, were used to elucidate the formation and characterization of silver-cyanobacterial nanoparticles (Ag-CNPs). Results showed that the original color of the cell extract changed from reddish blue to dark brown after addition of silver nitrate solution (1 mM) within 1 h, suggesting the synthesis of Ag-CNPs. That the formation Ag-CNPs indeed occurred was also evident from the spectroscopic analysis of the reaction mixture, wherein a prominent peak at 420 nm was noted. TEM images revealed well-dispersed, spherical Ag- CNPs with a particle size in the range of 10-50 nm. The X-ray diffraction spectrum suggested a crystalline nature of the Ag-CNPs. FTIR analysis indicated the utilization of a hydroxyl (-OH) group in the formation of Ag-CNPs. Ag-CNPs exhibited strong antibacterial activity against three multidrug-resistant bacteria. Additionally, Ag-CNPs strongly affected the survival of Dalton`s lymphoma and human carcinoma colo205 cells at a very low concentration. The Ag-CNPs-induced loss of survival of both cell types may be due to the induction of reactive oxygen species generation and DNA fragmentation, resulting in apoptosis. Properties exhibited by the Ag-CNP suggest that it may be used as a potential antibacterial and antitumor agent.