Silver nanoparticles (Ag-NPs) have attracted huge importance due to their distinctive chemical, biological and physical properties. Silver nanoparticles are widely synthesized by the chemical method, which involves the use of toxic chemicals which affects its applications. The bio-reduction method, in comparison with chemical method is more economic and eco-friendly. In the present work, the bio-based production of Ag-NPs was done by using peel extract of orange (citrus sinensis), which played a role of reducing and stabilizing agent. The biosynthesis of silver nanoparticles was optimized by one factor at a time (OFAT) with respect to peel extract concentration, silver nitrate concentration and reaction temperature. The green synthesized silver nanoparticles were characterized by UV-visible spectroscopy, Fourier transforms infrared (FT-IR) spectroscopy, Scanning electron microscopy (SEM) and X-ray diffraction (XRD). Disk diffusion method was used for the study of antibacterial activity of the bio-synthesized silver nanoparticles against the bacteria Escherichia coli and Staphylococcus aureus. The results showed that at a peel extract concentration of 6%, the temperature of 60oC and silver nitrate concentration of 0.1M, the synthesis of Ag-NPs was effective. The orange peel synthesized Ag-NPs showed effective antibacterial activity against both bacteria. However better activity was observed against bacterium Staphylococcus aureus. The results confirmed the synthesis of Ag-NPs using peel extract of citrus sinensis and its role as antibacterial agent.