The present investigation attempts at fabricating collagen-based scaffolds impregnated with sago starch capped silver nanoparticles (AgNPs), useful for biomedical applications, and aims at studying their physicochemical aspects. AgNPs synthesized through a chemical reduction method, capped using different concentrations of sago starch, are incorporated into collagen derived from fish scales, and lyophilized to form scaffolds. FT-IR spectra confirm and validate the interaction of sago starch capped AgNPs with collagen in the scaffolds. TGA and DSC results indicate enhanced thermal stability of collagen scaffolds impregnated with sago capped AgNPs compared to collagen alone. All the collagen scaffolds containing sago starch capped AgNPs show high tensile strength values for their use as wound dressing materials. Moreover, lower minimum inhibitory concentration values are obtained for the above capped AgNP collagen scaffolds, which indicate higher antibacterial activities compared to uncapped AgNPs tested against both gram positive and negative bacterial strains. The novelty is that the developed scaffolds are biodegradable and in vitro studies reveal them as biocompatible and suitable for tissue regeneration applications.