In this study, a ternary magnetically separable nanocomposite of silver nanoparticles (AgNPs) embedded in magnetic graphene oxide (Ag/FeO@GO) was designed and synthesized. Beta-cyclodextrin was used as a green reducing and capping agent for decorating of AgNPs on FeO@GO. The fabricated material was characterized using X-ray diffractometry, Fourier transform infrared spectroscopy, scanning electron microscopy, vibrating sample magnetometry, and energy-dispersive X-ray spectroscopy. The catalytic properties of the prepared Ag/FeO@GO for the reduction of 4-nitrophenol (4-NP) and methylene blue (MB) dye with sodium borohydride were investigated in detail. The morphological and structural studies revealed that FeO and AgNPs with a mean size of 12 nm were uniformly distributed on the GO sheet at high densities. The catalytic tests showed that Ag/FeO@GO exhibited an ultrafast catalytic reduction of 4-NP and MB with a reduction rate constant of 0.304 min and 0.448 min, respectively. Moreover, the catalyst demonstrated excellent stability and reusability, as evidenced by the more than 97% removal efficiency maintained after five reuse cycles. The Ag/FeO@GO catalyst could be easily recovered by the magnetic separation due to the superparamagnetic nature of FeO with high saturated magnetization (45.7 emu/g). Besides, the formation of networking between the formed AgNPs and β-CD through hydrogen bonding prevented the agglomeration of AgNPs, ensuring their high catalytic ability. The leaching study showed that the dissolution of Fe and Ag from Ag/FeO@GO was negligible, indicating the environmental friendliness of the synthesized catalyst. Finally, the high catalytic performance, excellent stability, and recoverability of Ag/FeO@GO make it a potential candidate for the reduction of organic pollutants in wastewater.