Silver nanoparticles were synthesized by chemical reduction method. The surface of silver nanoparticles (SNPs) was modified using polyvinylpyrrolidone to make them more compatible with pyrrole. Surface-modified SNPs were dispersed in pyrrole and polymerized via in situ oxidative polymerization technique. The molar ratio of monomer unit to initiator and dopant was 1:1:1 and the weight percent of SNPs in polymer matrix was varied from 1 to 10. The properties of polypyrrole-silver nanocomposites have been characterized using Fourier transform infrared spectroscopy, X-ray diffraction, scanning electron microscope, transmission electron microscope, thermo-gravimetric analysis and four-probe resistivity meter. All these characterizations indicate that the polypyrrole-silver nanocomposite is successfully synthesized via in situ oxidative polymerization and electrical extent shows suitable conductivity.