Toxicity of textile effluent is a globally alarming issue nowadays. In order to address this problem, a cost-effective and environment-friendly technique for adsorption of toxic dyes has been introduced in this research. Firstly in this study, green synthesis of silver nanoparticles (AgNPs) having antibacterial efficacy, had been carried out using leaf extracts of Azadirachta indica as reducing as well as capping agent. This research idea was further extended for the development and application of a novel method of preparation of silver-nanocomposite using synthesized microwave-assisted AgNPs with soil as a novel nanocomposite to adsorb hazardous dyes. However, this nanocomposite was found to possess higher efficiency and adsorption capacity in comparison to soil as adsorbent for the removal of crystal violet dye under same experimental conditions. Additionally, it was also observed that use of this Ag-nanocomposite as adsorbent helped in achieving about 97.2 % removal of crystal violet dye from the effluent solution. © 2013, The Author(s).