This work reported a facile and green method to prepare highly stable and uniformly distributed Ag nanoparticles (AgNPs), in which a biopolymer xylan was used as the stabilizing and reducing agent via the Tollens reaction under microwave irradiation. Different variables were evaluated to optimize the reaction conditions. Complete characterization was performed using UV-Vis, XRD, TEM, size distribution analysis and XPS. The results revealed that AgNPs were well dispersed with diameters of 20-35 nm due to the packing of xylan. The optimal conditions were as follows: microwave irradiation temperature was 60-70 °C, microwave power was 800 W, microwave time was 30 min, the ratio of xylan to AgNO3 was 50 mg: 0.13 mmol, and ammonia concentration was 2%. In addition, the AgNPs were collected via high-speed centrifugal separation, and the supernatant was tested by HPAEC, GPC, FT-IR, and NMR. By comparing the structure of xylan before and after the reaction, the reaction mechanism was discussed. It was noted that the xylan-AgNPs composites showed high selectivity and sensitivity for Hg(2+) detection. The other 15 metal ions used had no obvious effect on the detection of Hg(2+), and the limit of detection (LOD) was 4.6 nM, which is lower than the allowed maximum level of 30 nM for drinking water by WHO. In addition, the xylan-AgNPs composites can be applied for Hg(2+) detection in real water samples. This study provides a novel way for the high-value utilization of a rich biomass resource, and a green method for the synthesis of AgNPs for the selective and sensitive detection of harmful heavy metals.