Development of multipurpose materials like graphene–silver hybrid nanocomposite has attracted much appreciation in recent years because of their improved synergistic properties like higher effective surface area, high electron mobility, stability, and biocompatibility. Here, we report the synthesis, characterization, and multifunctional properties of reduced graphene oxide/silver (rGO/Ag) nanohybrid. This novel material shows promising results against two antibiotic resistant bacteria—Escherichia coli and Bacillus subtilis. The toxicity study on Gram-negative bacteria (Escherichia coli) and Gram-positive bacteria (Bacillus subtilis) was done by the evaluation of cell viability through Resazurin-based Microtitre Dilution Assay (RMDA). We have observed that this nanohybrid is more effective against Bacillus subtilis than Escherichia coli which is different from the conventional observations. With Dalton’s Lymphoma Ascites cells (DLA), we have examined short-term in vitro cytotoxicity of this nanohybrid by trypan blue dye exclusion technique. The anticancer response of this nanohybrid was recorded with Human Colon epithelial carcinoma cells (HCT-15) as well by MTT assay. We also report SERS effect of (rGO/Ag) substrate in detecting very small amounts of Rhodamine B molecules by estimating the analytical enhancement factor.