Nanotechnology is the science and engineering of creating structures in the nanometer scale which have been applied in the field of drug delivery, catalysis, optical devices and nanoelectronics. Although nanomaterials may be synthesized using chemical approaches it is now possible to use biological materials for the same. Biological systems, masters of ambient condition chemistry, synthesize inorganic materials that are hierarchically organized from the nano to the macroscale. Recent studies on the use of microorganisms in the synthesis of nanoparticles are a relatively new and exciting area of research with considerable potential for development. In this review, we critically asses the role of biological entities such as plants and microorganisms in the synthesis of gold and silver nanoparticles and their advanced applications in the field of medicine and catalysis.