Modification of cellulose with silver nanoparticles produces various nanocomposites with significantly developed properties. This work aims to prepare a PVA hydrogel modified with cellulose/silver nanocomposites having potential applications in various fields including biomedical, antimicrobial inhibition, textile wears, etc. Microfibrillated cellulose/silver nanocomposites hydrogels were prepared in the aqueous medium with aid of microwave-assisted heating. Different percentages of nanocomposites were incorporated in PVA hydrogel to enhance the properties of PVA hydrogel. Prepared products were characterized by UV–Visible spectroscopy, FTIR, TGA, XRD, and SEM. The swelling (in water saline, acidic and alkaline solution), tensile, thermal, and antibacterial properties were also examined. The formation of Ag nanoparticles (AgNPs) in the (MFC-Ag)NC was confirmed by XRD and UV–Vis spectra. UV–Vis spectra showed the characteristic peaks of Ag in the UV–Vis spectra at 425 nm. Final products exhibited significant porosity and maximum swelling of 519.44%. The thermal stability of hydrogel increased with an increased percentage of (MFC-Ag)NC. Hydrogels exhibited significant antimicrobial inhibition against multidrug-resistant microorganisms, including Escherichia coli, Staphylococcus aureus, and Pseudomonas aeruginosa.