Development of reliable and eco-friendly processes for synthesis of metallic nanoparticles is an important step in the field of application of nanotechnology. Biological systems provide a useful option to achieve this objective. In this study, potent fungal strain was selectively isolated from soil samples on silver supplemented medium, followed by silver tolerance (100-1,000 ppm) test. The isolated fungus was subjected to morphological, 18S rRNA gene sequencing and phylogenic studies and confirmed as Cochliobolus lunatus. The silver accumulation and nanoparticle formation potential of wet cell mass of C. lunatus was investigated. The accumulation and nanoparticle formation by wet fungal cell mass with respect to pH change was also studied. The desorbing assay was used to recover accumulated silver from cell mass. C. lunatus was found to produce optimum biomass (0.94 g%) at 635 ppm of silver. Atomic absorption spectroscopy study showed that at optimum pH (6.5 ± 0.2), cell mass accumulates 55.6% of 100 ppm silver. SEM and FTIR studies revealed that the cell wall of C. lunatus is the site of silver sorption, and certain organic groups such as carbonyl, carboxyl, and secondary amines in the fungal cell wall have an important role in biosorption of silver in nanoform. XRD determined the FCC crystalline nature of silver nanoparticles. TEM analysis established the shape of the silver nanoparticles to be spherical with the presence of very small-sized nanoparticles. Average size of silver nanoparticles (14 nm) was confirmed by particle sizing system. This study reports the synthesis and accumulation of silver nanoparticles through reduction of Ag(+) ions by the wet cell mass of fungus C. lunatus.