This is the first report on the usage of fruiting bodies of shiitake mushroom (Lentinula edodes) and silk sericin extracts as green reducer agents incorporated in the myco-synthesis of zinc oxide nanoparticles, coated with chitosan polymer that functions as a stabilizer was performed. The synthesized ZnO NCs were investigated by various techniques in order to confirm the production, particle size, and other properties. FTIR analysis confirmed the presence of functional groups in extracts and synthesized nanocomposites, which was further supported by X-ray photoelectron spectroscopy. The confirmation was verified by HRTEM analysis. XRD results revealed the crystalline structure with a size of 21 nm and 25 nm for silk sericin NCs and mushroom NCs, respectively, which was confirmed by HRTEM. Further, HRTEM proved the formation of cubic/hexagonal shapes with consistent sizes. The antibacterial effectiveness of nanocomposites was tested against two bacterial strains E. coli and Bacillus subtilis. The results showed that the E. coli strain was practically resistant to these NCs, whereas B. subtilis was quite sensitive. The findings point to a mechanism for ZnO NCs in cell death caused by complete DNA destruction. Under UV light, the photocatalytic effectiveness of biosynthesized ZnO NCs was evaluated for the methylene blue (MB) dye degradation process. 90% of the dye was degraded within 135 min. The prepared ZnO CH-SS NCs can therefore be employed as a photocatalyst for the breakdown of toxic dyes found in wastewater and it could be used as a promising antibacterial product.