This study presents a sustainable approach to enhance cotton fabrics with multifunctional properties by in-situ functionalization using polydopamine (PDA) coating followed by the deposition of silver nanoparticles (AgNPs) through a self-reduction process. Polydopamine was chosen for its excellent adhesive and reductive properties, facilitating the uniform attachment of silver nanoparticles on the fabric surface. The functionalized fabrics were thoroughly characterized using FTIR, Raman spectroscopy, SEM, EDS, TGA, contact angle measurements, and XRD, confirming the successful integration of PDA and AgNPs. The modified cotton fabrics demonstrated 100% antibacterial activity against Staphylococcus aureus and achieved a water contact angle of approximately 131°, indicating enhanced hydrophobicity. Thermal stability was also improved, with a 15% increase in ash content at 600°C. This dual-functional coating approach provides an effective means to develop antibacterial, water-resistant, and thermally more stable textile materials, offering potential applications in protective clothing, and other functional fabric domains.