In this work, a ternary polyacrylamide-based composite hydrogel with functionalized graphene and silver nanoparticles was fabricated by a facile, fast and inexpensive water-based approach. The structures and catalytic properties of the prepared hydrogels with different compositions were investigated in depth. Silver ions were demonstrated to have a catalytic effect on the polymer gelation reaction, which could thereby be dramatically accelerated. In addition, the low-temperature thermally functionalized graphene with a portion of oxygen functionalities and structural defects was found to play a key role in the formation of a high-performance composite hydrogel by its superior catalyst-carrying capacity and electron-transferring ability. The binary composite hydrogel without the functionalized graphene showed a much lower catalytic activity as compared to the ternary counterparts, and the catalytic performance of the ternary composite hydrogel could be further enhanced by loading a higher amount of the functionalized graphene. A new cross-linking network was evidenced to be formed after incorporation of the functionalized graphene, which could enable silver nanoparticles to be highly stabilized in the double cross-linking network matrix and thus led to the excellent reusability of the ternary composite hydrogel for several runs of catalytic reduction of different kinds of catalysants. The hydrogel catalyst could be handled much more conveniently for re-usage in different runs owing to its monolithic structure as compared to the conventional powdery catalysts. Moreover, the synergistic effects of the porous polymer network with adsorption capacity, functionalized graphene sheets having huge surface area for supporting a large number of silver nanoparticles and exceptional electron-transferring ability, and catalytically active silver nanoparticles were well demonstrated, along with a deep insight into the mechanism for the extraordinary catalytic performance of the ternary composite hydrogel.