Hybrid ZnO@Ag core-shell heterojunction nanorods were synthesized using a novel, facile two-step process based on hydrothermal and seed mediated growth techniques. The material was characterized by UV-visible spectroscopy, Fourier transform-infrared spectroscopy (FT-IR), room temperature photoluminescence spectroscopy (RTPL), Raman spectroscopy, thermogravimetric analysis (TGA), X-ray diffraction (XRD), high resolution transmission electron microscopy (HRTEM) and X-ray photoelectron spectroscopy (XPS). The hybrid ZnO@Ag core-shell nanorods were comprised of one-dimensional (1D) ZnO nanorods serving as a core material, over which surface-doped Ag nanoclusters (∼2.5 nm) were anchored as a heterogeneous shell. The presence of oxygen vacancies and Zn interstitials were confirmed by RTPL and Raman spectroscopic analysis. The photocatalytic activity of the hybrid ZnO@Ag core-shell nanorods was studied in comparison to bare ZnO nanorods using standard R6G dye and industrial textile dyes such as Congo red and Amido black 10B under UV and visible light (solar) irradiations. Moreover, the material was tested for real time industrial textile effluents under ambient conditions and was found to be highly efficient. The enhanced photocatalytic property observed for ZnO@Ag hybrid core-shell nanorods is attributed to a phenomenal increase in oxygen related defects in the core that generate photo-induced charge carriers and the presence of plasmonic Ag nanoclusters in the shell, which act as a sink for the photo-induced charge carriers.