Microwave plasma is considered a crucial engineering technology and an effective method for preparing silver nanoparticles (AgNPs) with controllable properties, thereby opening up numerous possibilities for their application in environmental remediation and water treatment technologies. The structural and optical characteristics of the prepared AgNPs, as well as their photocatalytic activity toward methylene blue dye degradation, were investigated. AgNPs were prepared using a microwave plasma system at operating voltages of 150, 160, and 170 V. Plasma diagnostics based on the Boltzmann plot revealed that increasing the applied voltage gradually increased the electron temperature (Te) from 4.02 to 6.13 eV. UV–Vis analysis confirmed the formation of silver nanoparticles through the appearance of the characteristic absorption band in the 290–300 nm range. X-ray diffraction (XRD) results revealed the formation of pure metallic silver (Ag) phases at 150 and 160 V, while mixed phases of silver and silver oxide (Ag/AgO) were observed at 170 V due to increased plasma activity and partial surface oxidation of the particles. Additionally, the average crystallite sizes of 18.7 nm at 150 V, 12 nm at 160 V, and 11.6 nm at 170 V indicate an improvement in crystallinity and a reduction in crystallite size. The results showed that 160 V achieved the best efficiency in dye degradation, recording the highest kinetic rate constant (k = 0.0602 min⁻¹) compared to 150 V and 170 V, indicating that this voltage provided a better balance between particle size, activity, and effective surface area, with the highest photodegradation efficiency of 97.5%. These results confirm that the microwave plasma system at atmospheric pressure is an effective and controllable engineering technique for producing highly efficient silver nanoparticles, making it promising for photocatalytic applications and the treatment of organic pollutants in water.