Wound management is a complex process that involves the application of tissue scaffolds/nanocomposites for wound healing treatment. An ideal wound dressing possesses excellent mechanical properties, good biocompatibility and effective antibacterial activity. The present study optimized silver nanoparticles (AgNPs) using a eugenol microemulsion (EuME) incorporated with polyvinyl alcohol (synthetic polymer) to fabricate efficacious nanofibers via an electrospinning technique by optimizing polymer concentration, applied voltage, needle tip-collector distance and flow rate adjusted to 9%, 25 kV, 15 cm and 0.5 ml h-1 respectively. The results of SEM showed a homogeneous distribution of well-oriented electrospun nanofibers (ESNs) with a uniform pore diameter of 404.1 nm and elemental silver composition of 13.93%. The hydrogen bonding and physical interaction between the nanofibers were observed by FTIR. The thermal stability and specific functionality of nanofibers were investigated by TGA/DTA analysis. The synthesized eugenol microemulsion-silver nanoparticle nanofibers (EuME-AgNP-NFs) were compared with silver bandaid-suspended nanoparticle nanofibers (SBD-AgNP-NFs) to monitor the efficiency and toxicity in the biological system. The eugenol microemulsion-silver nanoparticles (EuME-AgNPs) exhibited the highest antibacterial efficacy against Staphylococcus aureus. The silver release behaviour of EuME-AgNP-NFs showed sustained and controlled release of silver ions in the simulated wound fluid system. The interaction of EuME-AgNPs with lymphocytes and erythrocytes revealed the maximum rate of cell viability (69.81%) and minimum rate of red blood cell breakdown (19.44%) in the human biological system when compared with silver bandaid-silver nanoparticles (SBD-AgNPs). The fabricated EuME-AgNPs-NFs with effective antibacterial activity and sustained release of silver ions provide a suitable environment for wound healing and could be used for cut wounds in clinical practice. © 2021 The Royal Society of Chemistry.