Abstract: Nanobiotechnology has emerged as integration between biotechnology and nanotechnology for developing bioactive, biosynthetic and ecofriendly technology for synthesis of nanomaterials. This study has investigated extracellular biosynthesis of silver nanoparticles using Bacillus subtillus IA751. The synthesis of silver nanoparticles was rapid and within few hours silver ion makes contact with the cell filtrate and reduces Ag+ to Ag0. The reaction time was shortened from a long period, nearly one month, to a couple of hours. As the bioreduction process went on, the color of the culture medium changed from pale yellow to brown. UV-visible spectrum of the liquid medium containing silver ion showed a peak at 450 nm corresponding to the plasmon absorbance of silver nanoparticles. The antimicrobial properties of silver nanoparticles were investigated using Escherichia coli, Staphylococcus epidermidis, Staphylococcus coagualase positive, Serratia spp. and Salmonella typhi. The bactericidal effect of silver nanoparticles was compared based on diameter of inhibition zone in disk diffusion tests. Bacterial sensitivity to nanoparticles was found to vary depending on the microbial species. Disk diffusion studies with E. coli and S. coagualase positive revealed greater effectiveness of the silver nanoparticles than other microorganisms.