Dye effluents discharged from various industries contribute to environmental contamination, making their treatment highly necessary. Infectious diseases also pose a threat to public health worldwide. Nanomaterials have promising features and are potential candidates for overcoming the problems of drug resistance in microbes and environmental pollution. Therefore, this study aimed to synthesize zinc oxide (ZnO) and magnesium-doped zinc oxide (Mg-doped ZnO) nanoparticles (NPs) using the plant extract of for applications in photocatalysis and antimicrobial activity. A sample of leaves was collected from Motta, in the eastern Gojjam zone of Ethiopia. The leaves were air-dried and then ground into a powder. The powdered plant material was extracted using distilled water. The ZnO and Mg-doped ZnO NPs were synthesized using 0.1 M Zn(NO)·6HO, 7.5% 0.1 M Mg(NO)2.6HO, and 10 mL of the leaf extract. The nanoparticles (NPs) were characterized using UV-vis, FT-IR, XRD, and SEM. The average crystallite sizes of ZnO and Mg-doped ZnO NPs were determined using the Debye-Scherrer formula and were found to be 28.1 and 34.4 nm, respectively. The antimicrobial activity of the synthesized NPs was evaluated against four bacterial strains (, , , and ) and one fungal strain () by using the agar disk diffusion method. The Mg-doped ZnO NPs exhibited significant antimicrobial activity, with a maximum zone of inhibition measuring 24 and 22 mm against and , respectively. The photocatalytic activity of ZnO and Mg-doped ZnO NPs was investigated by studying the degradation of methylene blue (MB) dye under sunlight irradiation for 120 min. The results showed that Mg-doped ZnO NPs exhibited higher photocatalytic activity (99.6%) than ZnO NPs (94.1%). In conclusion, the synthesized NPs could serve as viable alternatives for antimicrobial drugs and photocatalysts to mitigate the pollution of the environment caused by organic dyes.