Nanocomposites based on inorganic/graphene nanoparticles have gained remarkable interest as a novel class of hybrid materials. Scientific community attention towards these substances has been increasing, because of their peculiar characteristics in combining anticipated features of building constructs for specified applications. Graphene oxide (GO) and metal nanoparticles (MNPs) are using separately in different applications due to their specific limitations. Researchers continue to explore ways to overcome these challenges and create functional nanomaterials for various fields by combining unique advantages of GO and MNPs. Here, we used a facile one-step method for the synthesis of reduced graphene oxide–palladium composite (RGO/Pd). Environmental-friendly biofabricated palladium nanoparticles adhered to Polyscias scutellaria (PS) leaf extract mediated RGO/Pd have been presented in the current investigation. The biofabricated nanohybrid (RGO/Pd) was analysed utilizing several microscopic and spectroscopic techniques. Further, we have also examined the catalytic function for the reduction of 2-nitroaniline (2-NA) in detail. Primarily, we observed that the synthesized nanocomposite can catalyse simultaneous reduction of 2-NA. Furthermore, an added advantage of the as prepared RGO/Pd nanocomposite is its antimicrobial and antifungal ability. Further, we exhibited that the mesenchymal stem cells of adult goat were viable in the presence of RGO/Pd of 0.1 mg/mL concentration and their properties of stem cells were retained. The outcomes displayed that the nanocomposites exhibited outstanding functioning in the killing of dangerous microbial and fungal pathogens. All these results strengthen the RGO/Pd composite applicability in future for potential therapy in bone tissue engineering applications.