Silver nanoparticles (AgNPs) are one of the new cancer treatment tools due to their unique properties that enhance potential therapeutic efficacy. In this study, we describe the extracellular biosynthesis and anticancer activity of AgNPs using the Anabaena flos-aquae biomass extract as reducing agent. The formation of dark-brown AgNO3/extract solution confirmed the reduction of silver ions into AgNPs. In addition, the ultraviolet–visible spectroscopy showed the surface plasmon peak at 425 nm as characteristic peak for AgNPs. Transmission electron microscopy and scanning electron microscopy showed highly stable and mostly spherical AgNPs with average size of 5–25 nm. Fourier transform infrared spectral analysis confirmed the presence of biomolecules in the extract involved in the reduction and stabilization of AgNPs. In vitro, study of anticancer and cytotoxic effect of AgNPs and extract against T47D cell lines by MTT assay and flow cytometry confirmed the anti-proliferation potential of AgNPs against breast cancer cells. In conclusion, our results revealed that Anabaena can be used as a good organism for biologically synthesis of AgNPs and confirmed the potent therapeutic value of these nanoparticles as anticancer drugs.