The study investigated the capacity of the endophytic fungus Talaromyces funiculosus to biosynthesize extracellular AgNPs and assess their safety. The fungus was identified through morphological and phylogenetic analyses. The biosynthesized AgNPs were spherical crystalline, stable (6 months), and mono-dispersed (PDI: 0.007), exhibiting SPR at 422.5 nm, average diameter of 34.32 nm, and Zeta potential of -18.41 mV. The optimal biosynthesis conditions are 1 mM AgNO, 5 g biomass, pH 5.5, and a reaction temperature of 60 °C. Escherichia coli (bacterial strains) and Candida tropicalis (yeast strains) exhibited the highest susceptibility with inhibition zones of 26.3 mm and 22.3 mm, respectively, at 50 µg/mL of AgNPs, and MICs of 3.7 µg/mL and 6.3 µg/mL, respectively. AgNPs exhibited cytotoxicity with IC values of 48.11 ppm for HEK-293 and 35.88 ppm for Hep-G2 cells, showing selective toxicity toward cancer cells. They demonstrated antioxidant activity by increasing GSH (10.29 to 14.76 mmol/g) and reducing MDA (40.57 to 26.28 nmol/ml) at 48.11 ppm. AgNPs also enhanced IL-10 production (96.47 to 177.0 pg/mL) and reduced TNF-α levels (55.77 to 41.06 pg/mL), indicating their anti-inflammatory properties. These results support the safe use of low-dose AgNPs, however, further studies are needed to evaluate AgNPs for clinical uses.