Realizing the widespread demand for biocompatible supramolecular hydrogel based wound dressings, we have developed an N-terminally 2(naphthalen-6-yl)acetic acid (Nap) protected Phe-Phe-Cys peptide (Nap-FFC) using a liquid phase method. This Nap-FFC peptide was used to design a supramolecular hydrogel via a self-assembling process. The Nap-FFC short peptides produced stable and transparent silver nanoparticle-based hydrogels (AgNPs@Nap-FFC) wherein the self-assembled Nap-FFC nanofibers acted as scaffolds for the mineralization of silver nanoparticles (AgNPs) and stabilizers of the synthesized AgNPs. The resultant AgNPs@Nap-FFC nanocomposites were characterized using ultraviolet-visible spectrophotometry (UV-vis spectroscopy), Fourier transform infrared spectroscopy (FT-IR), transmission electron microscopy (TEM) and scanning electron microscopy (SEM) combined with energy-dispersive X-ray spectroscopy (EDX) studies. The AgNPs@Nap-FFC nanocomposites showed excellent monodispersity, long term stability, and functional flexibility in comparison to other AgNP based nanocomposites. Furthermore, AgNPs@Nap-FFC exhibited strong inhibition against both Gram-positive (methicillin-resistant Staphylococcus aureus) and Gram-negative (Acinetobacter baumannii) bacteria and, most importantly, they showed favorable biocompatibility towards human cervical carcinoma cells (HeLa cells). Hence, this study implies that AgNPs@Nap-FFC nanocomposites can easily be prepared in a cost-effective manner and can be used effectively for future antibacterial wound dressings.