This study aimed to estimate the potential optoelectronic and biological properties of AgO:ZnO nanocomposite synthesized by an environmentally friendly method. The synthesis of nanocomposite was carried out by reducing silver nitrate with Salvia hispanica extra, and zinc nitrate was mixed to produce the nanocomposite. An extensive examination was carried out on the physical and biological characteristics of the synthesized nanocomposite using several approaches. The EDX analysis confirmed the purity of the synthesized sample via the presence of elements Ag, Zn, and O only in the nanocomposite. The crystal structure of nanocomposite with hexagonal phase and average crystallite size of 56.8 nm was confirmed by X-ray diffraction. The formation of fibrous AgO:ZnO nanoparticles with an average diameter of 1.021 ± 0.6 μm was indicated by field-emission scanning electron microscopy examination. The optical property investigation revealed that the nanocomposite had a wide absorption band with an absorption peak at 425 nm. The observed phenomenon was attributable to the occurrence of electronic transitions within the material. The direct bandgap energy of 2.90 eV and the Urbach energy of 0.456 eV for the nanocomposite demonstrated the presence of defect states in the bandgap region. The measured values of the conduction band edge (ECB) and valence band edge (EVB) additionally revealed the material’s electronic structure. The biological potential of AgO:ZnO nanocomposite was evaluated by the agar well diffusion technique against Gram-positive and Gram-negative bacteria and a fungus. The extensive investigation of the AgO:ZnO nanocomposite’s characteristics has shown its potential for use in a wide range of photonic, optoelectronic, and biological applications.