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The main aim of the study is to formulate and evaluate hydrogel containing azithromycin and silver nanoparticles to treat wound dressing, burn infections, acne, Pharyngitis and Tonsillitis, psoriasis, etc. The Silver nanoparticles were prepared by green synthesis approach with the help of reduction of silver nitrate by Azadirachta indica leaves extract. Azithromycin was chosen as antimicrobial drug, however it shows adverse effect when administered in high dose, hence to reduce dose of azithromycin it was decided to make formulation containing silver nanoparticles and azithromycin. The drug loading and drug delivery techniques were searched for topical as well as bone grafting purpose. Initially mixing of Silver nanoparticles, Azithromycin and Bis acrylamide in ammonium persulphate were done and added N, N dimethyl amino ethyl methacrylate (DEM) to form semisolid mass that is hydrogel. Hydrogel formulation was found fantastic results with azithromycin and silver nanoparticles. The compatibility study was done for silver nanoparticles with polymer and azithromycin and all are found compatible with each other. All the formulations were characterized for consistency, spreadability, efficacy, safety and stability. From all F1-F12 Hydrogel Formulations F4 batch was optimized by parameters like pH measurement, spreadability, Drug content, Drug release and antimicrobial assay. So F4 batch was further evaluated for SEM, XRD, FTIR, skin Irritation study and showed good results. Hydrogel formulation of azithromycin and silver nanoparticles formulated for Azithromycin as a antimicrobial drug, however it shows adverse effect when administered in high dose, hence to reduce dose of azithromycin it was decided to make formulation containing silver nanoparticles and azithromycin. It was concluded that formulation was compatible with animal as well as human being with excellent evaluation results.