Nobel metal nanoparticles have drawn significant attention for a wide range of new applications in various fields including biology and medicine. Research work during the last two decades have clearly demonstrated that the properties of nanoparticles, in particular silver nanoparticles are strongly influenced by shape, size and size distribution, which is dictated by the synthetic method adopted. In this review, we enumerate various top-down and bottom up approaches to synthesize nanoparticles. Chemical reduction method is one of the simple and facile approaches for bottom-up synthesis of silver nanoparticles and the stability of the synthesized nanoparticles has been found to be influenced by the type and amount of reducing agent and type of stabilizer used. Some of the capping reagents discussed including citrate salts, oleic acid, amino silanes, and polyelectrolytes so as to stabilize the nanoparticles. Instead of using polyelectrolytes to conjugate nanoparticles, biomacromolecules have been used to stabilize nanoparticles so that it renders the nanoparticles bioactive and biocompatible as well as provides additional functionalities for further biological interactions. Surface modification of nanoparticles with proteins such as Bovine Serum Albumin (BSA) is an effective approach to providing electrosteric stability to silver nanoparticles. We highlight the various pathways by which stabilized nanoparticles promote antibacterial activity and describe the impact of stabilized nanoparticles on mammalian cells. More importantly, in this review we describe the possibility of a concentration window at which nanoparticles are toxic to bacteria and not to mammalian cells, so that the nanoparticles loaded matrix could be designed with the intent that nanoparticles when released in the physiological medium can maintain a sterile environment against microorganisms while not inhibiting the growth of mammalian cells in the site specific region of intended application. Additionally, methodologies used to characterize the composition, morphology and biological properties of synthesized nanoparticles by multiple techniques have been presented.