The biosynthesis of metallic nanoparticles (MNPs), encompassing noble metals, metal oxides, and sulfides, has gained significant attention in recent years due to their unique properties and wide-ranging applications. However, traditional chemical synthesis methods often involve extreme conditions, harsh chemicals, and negative environmental impacts. Consequently, developing a simple, non-toxic, and eco-friendly approach for MNP synthesis is paramount. One promising method that addresses these concerns is using a bacterial cell-free extract (CFE) as a mediator for biosynthesis. Compared with other biosynthesis production methods, the purification process of MNPs synthesized using bacterial CFEs is much simpler, and CFE production is easier to standardize and reproduce. Bacterial CFEs are rich in various biomolecules, including proteins, enzymes, and peptides, which serve as both reducing and oxidizing agents during MNP formation. These biomolecules act as capping agents, contributing to the stability and monodisperse nature of MNPs. Using bacterial CFEs for MNP synthesis offers several advantages. Firstly, it aligns with eco-friendly practices as a biosynthesis approach. The non-toxic process minimizes environmental damage. Additionally, bacterial CFEs are cost-effective, making large-scale production economically viable. This review provides insights into these mechanisms, highlighting the role of CFE biomolecules and their impact on MNP characteristics. It also investigates the correlation between synthesis parameters, morphologies, and physical, chemical, and biological properties, allowing for tailored MNP design through the biosynthesis conditions. Despite its advantages, bacterial CFE-mediated biosynthesis faces challenges. This review addresses these challenges and discusses potential solutions. It also explores future perspectives, emphasizing areas for further investigation and innovation. In summary, using bacterial CFEs to synthesize MNPs offers significant advantages over other methods. It ensures eco-friendly, non-toxic, and cost-effective production. The review emphasizes the mechanisms and biomolecules involved, showcasing the potential for tailored MNP design. It also addresses challenges and prospects, paving the way for advancements in this field. Furthermore, the originality of this work lies in the exploitation of bacterial CFEs as a highly efficient and scalable platform for MNP synthesis.