Stenotrophomonas sp. is emerging as a popular microbe of global concern with various potential ecological roles. Biosynthesis of gold and silver nanoparticles (AgNPs) using this bacterial strain has shown promising applications in life sciences. However, there is no report on efficient agricultural applications of biosynthesized AgNPs using Stenotrophomonas sp. In this regard, successful biosynthesis of AgNPs using Stenotrophomonas sp. BHU-S7 (MTCC 5978) was monitored by Uv-visible spectrum showing surface plasmon resonance (SPR) peak at 440 nm. The biosynthesized AgNPs were spherical with an average mean size of ~12 nm. The antifungal efficacy of biosynthesized AgNPs against foliar and soil-borne phytopathogens was observed. The inhibitory impact of AgNPs (2, 4, 10 μg/ml) on conidial germination was recorded under in vitro conditions. Interestingly, sclerotia of Sclerotium rolfsii exposed to AgNPs failed to germinate on PDA medium and in soil system. Moreover, AgNPs treatment successfully managed collar rot of chickpea caused by S. rolfsii under greenhouse conditions. The reduced sclerotia germination, phenolic acids induction, altered lignification and H2O2 production was observed to be the probable mechanisms providing protection to chickpea against S. rolfsii. Our data revealed that AgNPs treated plants are better equipped to cope with pathogen challenge pointing towards their robust applications in plant disease management.