Mycoendophytes are the fungi that occur inside the plant tissues without exerting any negative impact on the host plant. They are most frequently isolated endophytes from the leaf, stem, and root tissues of various plants. Among all fungi, the mycoendophytes as biosynthesizer of noble metal nanoparticles (NPs) are less known. However, some reports showing efficient synthesis of metal nanoparticles, mainly silver nanoparticles and its remarkable antimicrobial activity against bacterial and fungal pathogens of humans and plants. The nanoparticles synthesized from mycoendophytes present stability, polydispersity, and biocompatibility. These are non-toxic to humans and environment, can be gained in an easy and cost-effective manner, have wide applicability and could be explored as promising candidates for a variety of biomedical, pharmaceutical, and agricultural applications. Mycogenic silver nanoparticles have also demonstrated cytotoxic activity against cancer cell lines and may prove to be a promising anticancer agent. The present review focuses on the biological synthesis of metal nanoparticles from mycoendophytes and their application in medicine. In addition, different mechanisms of biosynthesis and activity of nanoparticles on microbial cells, as well as toxicity of these mycogenic metal nanoparticles, have also been discussed.