Transition metal oxide NPs have delivered wide applications in various fields. Therefore, in this study, a novel fungus, Alternaria sp. (NCBI Accession No: MT982648) was isolated and characterized from the vicinity of medicinal plants. Eventually, in this method extracted proteins from isolated fungus were utilized to synthesize highly biocompatible zinc nanoparticles (ZnO NPs). The various physical techniques including UV-visible spectroscopy, TEM, HR-TEM, XRD, DLS, zeta potential, and FTIR were used to characterize particles. The UV-visible absorption (λMax) and binding energy for the as-synthesized particles were found to be 329 nm and 3.91 eV, respectively. Further, the polydispersed particles were revealed to have regular crystallinity with hexagonal wurtzite phase of ZnO with the spacing of ~2.46 Å under XRD and HR-TEM. The average size of a particle under TEM was found to be ~18 nm. The evaluation of various surface functional groups of particles was done by FTIR. The average hydrodynamic diameter of particles was found to be ~57 d. nm with 0.44 particle distribution index whereas the nanoemulsion stability was explained by Zeta potential (-9.47 mV). These particles were found to exhibit potential antibacterial and anticancer activities. They were found to be bactericidal against S. abony (MIC 5.73 μg/mL); B. pumilis (MIC 6.64 μg/mL); K. pneumonia (MIC 14.4 μg/mL); E. coli (MIC 8.7 μg/mL); B. subtilis (MIC 5.63 μg/mL) and S. aureus (MIC 12.04 μg/mL). Further, they are also found to be concentration-dependent anticancer and inhibited the growth of A549 cells (IC50-65.3 μg/mL) whereas they were found to demonstrate no any cytotoxicity against NRK normal kidney cell line. The internalization of particles into the nucleus (i.e., nuclear fragmentation and DNA damage) was confirmed by DAPI staining. The intracellular particles were found to generate excessive ROS. Further, the anticancer potential was also estimated by noticing a hike in oxidative stress parameters, cell viability, cell morphology, and change in mitochondrial membrane potential. We effectively synthesized potentially potent antibacterial and anticancer novel bioengineered ZnO NPs.