From an environmental perspective, a green/semi-green synthesis method of nanoparticles is in great demand because of its non-toxic, eco-friendly nature and cheap synthesis method. In this study, we report the synthesis of gold nanoparticles (AuNP) of less than 20 nm average size by controlled modification of starch, which was used here as a reducing as well as a capping agent. The effect of various precursor concentrations and the role of the reaction temperature on the size, stability, and optical properties of the synthesized gold nanoparticles (AuNP) were investigated. Various standard techniques along with surface plasmon resonance were analyzed for the characterization of AuNP. We observed that starch alone could induce the synthesis of AuNP in the presence of sodium hydroxide (NaOH) above 50 °C. Varying the starch concentration, reaction temperature, NaOH concentration was found to be responsible for tuning the size, fluorescence, and surface plasmon resonance. Thermo-gravimetric and FTIR analysis along with Benedict assay confirmed the modification in the starch structure during the AuNP synthesis. As an application, we demonstrated that our synthesized AuNP could sense the heavy metals Cu²⁺ and Pb²⁺ in ppm level through visible colorimetric changes as well as SPR shifting. Therefore, our modified starch based semi-green synthesis method using starch as a reducing as well as capping agent and NaOH as a catalyst demonstrated an environment-friendly method of AuNP synthesis. Moreover, their application in heavy metal sensing can be used in industry for the detection of heavy metal presence in contaminated water.