Highly stable dispersions of nanosized silver particles were synthesized using a straightforward, cost-effective, and ecofriendly method. Nontoxic glucose was utilized as a reducing agent and poly-α, γ, L-glutamic acid (PGA), a naturally occurring anionic polymer, was used as a capping agent to protect the silver nanoparticles from agglomeration and render them biocompatible. Use of ammonia during synthesis was avoided. Our study clearly demonstrates how the concentration of the capping agent plays a major role in determining the dimensions, morphology, and stability, as well as toxicity of a silver colloidal solution. Hence, proper optimization is necessary to develop silver colloids of narrow size distribution. The samples were characterized by Fourier transform infrared spectroscopy, ultraviolet-visible spectroscopy, field-emission scanning electron microscopy, transmission electron microscopy, and zeta potential measurement. MTT assay results indicated good biocompatibility of the PGA-capped silver nanoparticles. Formation of intracellular reactive oxygen species was measured spectrophotometrically using 2,7-dichlorofluorescein diacetate as a fluorescent probe, and it was shown that the PGA-capped silver nanoparticles did not induce intracellular formation of reactive oxygen species.