In this work, we report an completely green chemistry approach to synthesize silver nanoparticles (AgNPs) using the compound β-sitosterol-D-glucopyranoside (BS) isolated from the Indian sacred grass Desmostachya bipinnata, using natural sunlight as the initiator. BS synthesizes the AgNPs, in a free radical exchange process involving reactive oxygen species. The possible mechanism of BS on the reduction and stabilization of AgNPs is also discussed. The optical properties, morphology of the AgNPs were characterized by absorption spectroscopy and transmission electron microscopy. These bio inspired AgNPs exhibited good catalytic activity during the catalytic degradation of environmental hazardous organic dyes like methylene blue, methyl red, congo red and acridine orange, in aqueous media.