Diabetic neuropathy (DN), a prevalent complication of diabetes mellitus, is characterized by nerve damage due to hyperglycemia-induced inflammation and oxidative stress. Recent advancements in nanotechnology have spotlighted the green synthesis of silver nanoparticles (AgNPs) as a sustainable and nontoxic approach to combat such conditions. This review explores the therapeutic potential of AgNPs synthesized using Nigella sativa (black cumin) extract in alleviating DN through its antidiabetic, anti-inflammatory, and antioxidant properties. Experimental studies utilized 50 adult male albino rats divided into five groups: healthy controls, DN-induced untreated, and DN-induced treated with AgNPs, N. sativa extract, or green-synthesized AgNPs, respectively. Biochemical analyses revealed that DN rats exhibited elevated glucose, advanced glycation end-products (AGEs), aldose reductase, and inflammatory markers, alongside reduced insulin and disrupted oxidative status compared to controls. Notably, treatment with green-synthesized AgNPs significantly ameliorated these parameters, downregulating nerve growth factor and upregulating brain tyrosine kinase receptor A (TrkA) expression, indicating neuroprotection. A histopathological examination of brain tissue corroborated these findings, showcasing reduced neuronal damage in treated groups. Complementary evidence from related studies highlights the antimicrobial efficacy of N. sativa-derived AgNPs against diabetic foot ulcer (DFU) bacterial isolates, including Pseudomonas aeruginosa and Staphylococcus aureus, with characterization via UV-Vis spectroscopy, SEM, TEM, XRD, and FTIR confirming nanoparticle formation. These AgNPs demonstrated potent biofilm disruption and increased reactive oxygen species, enhancing their bactericidal effects. Additionally, thymoquinone, a key component of N. sativa, encapsulated in nanoscaffolds, boosts bioavailability and therapeutic targeting. Collectively, this review underscores the multifaceted potential of green-synthesized AgNPs with N. sativa extract as a novel neuroprotective and antimicrobial agent, offering a promising, cost-effective alternative to synthetic drugs for managing DN and associated complications through anti-inflammatory, antioxidant, and antidiabetic mechanisms.