This study uses the aqueous peel extract of Selenicereus undatus (dragon fruit) as a natural reducing and stabilizing agent to create silver nanoparticles (AgNPs) in an environmentally friendly and economical manner. The phytochemical screening for the extract of fruit peel was performed to identify the presence of alkaloids, flavonoids, tannins, phenols, terpenoids, steroids, saponins, and glycosides. The phytochemicals in the fruit peel extract may play an essential role in the green synthesis of nanoparticles as reducing, capping, and stabilizing agents which has been demonstrated spectroscopically by a surface plasmon resonance peak in the UV–visible range and visually by a shift in color from pale yellow to brown.The antidiabetic properties of the synthesized AgNPs were assessed in relation to those of their crude extract equivalents and conventional reference medications.. AgNPs' increased antidiabetic potential (IC50 = 75.16 µg/mL) in comparison to the extract (IC50 = 113.31 µg/mL) which was further demonstrated by α-Amylase inhibition experiments. These findings suggest that the synergistic interaction between silver and bioactive phytochemicals gives the green-synthesized AgNPs their higher pharmacological effect.