The phyto-synthesis of silver nanoparticles and cotton dyeing with natural colorants can reduce the environmental impact of the process considerably. In this study, the extraction of natural colorants from Achillea millefolium petals was optimized by ultrasound technique. The AMP extract was applied for synthesis of silver nanoparticles (Ag NPs) on the cotton fabrics. The dyeing, antibacterial and antioxidant characteristics of cotton samples were investigated to optimize the process and evaluate its efficiency. The AMP extract had good substantivity towards cotton fabrics and the presence of tannic acid, as an environmentally-friendly mordant, further improved the absorption of AMP dye. The antibacterial and antioxidant activities of the dyed samples with AMP extract of were 50% and 60%, respectively. The addition of TA and Ag enhanced the antibacterial and antioxidant activities on the cotton samples to over 99%.