Monodispersed silver quantum dots (Ag QDs) of sub 5 nm range are prepared through a facile and size-controllable green synthesis route using sweet lime (Citrus limetta) peel (SLP) extract. Powder X-ray diffraction studies confirm the formation of face-centered-cubic structured Ag QDs which is corroborated by selected area electron diffraction. The Ag QDs show an absorption maximum at ~415 nm due to characteristic surface plasmon resonance. The Ag QDs prepared at 80 °C exhibit high photoluminescence quenching, indicating low recombination rate and high lifetime of photoexcited electrons. The examination of SLP extract by Fourier-transform infrared spectroscopy, LC-MS and NMR spectroscopy reveals the presence of citrate and carbohydrate biomolecules that could be responsible for the formation of small and stable Ag QDs. The cytotoxic studies indicate that the synthesized Ag QDs are able to effect 71% cancer cells death at 100 µg/mL concentration. Moreover, Ag QDs exhibit minimum inhibitory concentration (MIC) value of 50 μg/mL against all the selected pathogenic bacteria. Present findings suggest that Ag QDs obtained by SLP extract mediated green synthesis can be employed as a low-cost and eco-friendly biocidal agent.