The biogenic approach for the synthesis of metal nanoparticles provides an efficient eco-friendly alternative to chemical synthesis. This study presents a novel route for the biosynthesis of silver nanoparticles using aqueous sandalwood (SW) leaf extract as a source of reducing and capping agents under mild, room temperature synthesis conditions. The bioreduction of Ag+ to Ago nanoparticles (SW-AgNPs) was accompanied by the appearance of brown color, with surface plasmon resonance peak at 340-360 nm. SEM, TEM and AFM imaging confirm SW-AgNP's spherical shape with size range of 10-32 nm. DLS indicates a hydrodynamic size of 49.53 nm with predominant negative Zeta potential, which can contribute to the stability of the nanoparticles. FTIR analysis indicates involvement of sandalwood leaf derived polyphenols, proteins and lipids in the reduction and capping of SW-AgNPs. XRD determines the face-centered-cubic crystalline structure of SW-AgNPs, which is a key factor affecting biological functions of nanoparticles. This study is novel in using cell culture methodologies to evaluate effects of SW-AgNPs on proliferating cells originating from plants and human cancer. Exposure of groundnut calli cells to SW-AgNPs, resulted in enhanced proliferation leading to over 70% higher calli biomass over control, enhanced defense enzyme activities, and secretion of metabolites implicated in biotic stress resistance (Crotonyl isothiocyanate, Butyrolactone, 2-Hydroxy-gamma-butyrolactone, Maltol) and plant cell proliferation (dl-Threitol). MTT and NRU were performed to determine the cytotoxicity of nanoparticles on human cervical cancer cells. SW-AgNPs specifically inhibited cervical cell lines SiHa (IC50-2.65 ppm) and CaSki (IC50-9.49 ppm), indicating potential use in cancer treatment. The opposing effect of SW-AgNPs on cell proliferation of plant calli (enhanced cell proliferation) and human cancer cell lines (inhibition) are both beneficial and point to potential safe application of SW-AgNPs in plant cell culture, agriculture and in cancer treatment.