The influence of nanomaterials on the ecological environment is becoming an increasingly hot research field, and many researchers are exploring the mechanisms of nanomaterial toxicity on microorganisms. Herein, we studied the effect of two different sizes of nanosilver (10 nm and 50 nm) on the soil nitrogen fixation by the model bacteria Azotobacter vinelandii. Smaller size AgNPs correlated with higher toxicity, which was evident from reduced cell numbers. Flow cytometry analysis further confirmed this finding, which was carried out with the same concentration of 10 mg/L for 12 h, the apoptotic rates were20.23% and 3.14% for 10 nm and 50 nm AgNPs, respectively. Structural damage to cells were obvious under scanning electron microscopy. Nitrogenase activity and gene expression assays revealed that AgNPs could inhibit the nitrogen fixation of A. vinelandii. The presence of AgNPs caused intracellular reactive oxygen species (ROS) production and electron spin resonance further demonstrated that AgNPs generated hydroxyl radicals, and that AgNPs could cause oxidative damage to bacteria. A combination of Ag content distribution assays and transmission electron microscopy indicated that AgNPs were internalized in A. vinelandii cells. Overall, this study suggested that the toxicity of AgNPs was size and concentration dependent, and the mechanism of antibacterial effects was determined to involve damage to cell membranes and production of reactive oxygen species leading to enzyme inactivation, gene down-regulation and death by apoptosis.