The structural, optical, and antimicrobial properties of silver oxide (AgO) nanoparticles fabricated by the atmospheric plasma jet method were examined. The nanoparticles were deposited as thin films under variable argon flow rates (0.5, 1.0, and 1.5 L/min) and characterized structurally, morphologically, and optically. X-ray diffraction analysis confirmed polycrystalline films with a preferred (111) crystallographic orientation, with crystallite size increasing from 15.78 to 18.85 nm at elevated flow rates, accompanied by a decline in dislocation density and macrostrain. Atomic force microscopy revealed a reduction in surface roughness and average particle size, suggesting the formation of smoother, more uniform films at higher flow rates. Optical characterization indicated a marginal narrowing of the bandgap from 1.85 to 1.75 eV as the flow rate increased. The antimicrobial efficacy was assessed against Gram-positive bacteria (Staphylococcus aureus, Staphylococcus epidermidis), Gram-negative bacteria (Klebsiella sp., Escherichia coli), and the fungus Candida albicans using the agar-well diffusion assay. Gram-positive bacteria demonstrated the greatest susceptibility, with a mean inhibition zone of 27.50 ± 1.64 mm, followed by fungi (25.33 ± 1.53 mm) and Gram-negative bacteria (25.33 ± 2.88 mm). The maximum inhibition zone of 29 mm was recorded for S. aureus at a flow rate of 1.5 L/min.