The growing challenges of wastewater treatment, driven by increasing industrialization, environmental pollution, and the emergence of novel contaminants, have intensified global concerns over water scarcity. Nanotechnology has recently emerged as a promising solution, particularly through the use of silver nanoparticles (AgNPs), which exhibit unique surface properties and enhanced chemical reactivity compared to their bulk counterparts. These nanoscale materials offer significant potential in environmental remediation, especially in the detection of heavy metals and the catalytic degradation of synthetic dyes and pesticides. This review highlights recent advancements in the green synthesis of silver nanoparticles using plant extracts, emphasizing their dual role as colorimetric sensors for heavy metal ions and as catalysts in dye degradation. The review also further explores the mechanisms underlying these applications, summarizes important findings from recent literature, and discusses existing challenges and future directions. This work aims to support the development of sustainable, plant-based nanomaterials for effective and eco-friendly wastewater treatment technologies.