In this study, we describe the rational design and synthesis of a redox-active petide–gallol conjugate and explore its application in the preparation of antimicrobial silver nanoparticles. Increase in acidity and redox activity of peptide–gallol compounds upon pi-stacking was predicted in silico. A representative phenyl alanine–glycine dipeptide–gallol conjugate was synthesized via click chemistry between N-propargyl dipeptide and azidomethyl pyrogallol. The enhanced redox properties of the conjugate were exemplified by rapid formation of silver nanoparticles (Ag NPs) at room temperature without the need of an external capping agent. The nanoparticles formed were found to exhibit prominent antifungal activity against Candida albicans NCIM 3471 along with robust biofilm eradication ability. Thus, our study established the hypothesis that rationally designed peptide–gallol conjugates can be used as biocompatible, redox-active moieties for in situ generation of non-toxic antimicrobial silver nanoparticles in a fast one pot chemical reduction method.