Silver nanoparticles (AgNPs) have attracted great interest due to their applications in various areas. In the present study ecofriendly biosynthesis of extracellular silver nanoparticles was carried out using Candida utilis NCIM 3469. Characterization of synthesized AgNPs was done by UV–visible spectroscopy, Scanning electron microscopy and antibacterial activity. AgNPs are found spherical in shape with size in the range of 20–80 nm. AgNPs showed antibacterial activity against pathogenic organisms such as Pseudomonas aeruginosa, Staphylococcus aureus, and Escherichia coli. The SEM analysis confirms the antibacterial activity of Ag nanoparticles due to damage of cytoplasmic membrane. AgNPs synthesized by C. utilis could be applicable in the development of antibacterial water filters for treatment of water.