Nanotechnology has rapidly developed as an important field of modern research, generating most promising applications in electronics and medicine. It involves different approaches for the synthesis and application of nanoparticles having dimension smaller than 100 nm. Nanoparticles are the fundamental building blocks for preparing many nanostructured materials and devices. Therefore, there is an enormous interest in developing safe, cost effective and ecofriendly techniques for synthesis of nanoparticles. Biological synthesis has emerged as an attractive alternative to overcome the side effects accompanied with physical and chemical methods of synthesis. This led to the development of new branch of nanotechnology called "green nanotechnology" or "nanobiotechnology" which combines biological principles with physical and chemical procedures to generate eco-friendly nanosized particles with specific functions. Various biological entities could be employed for the biosynthesis of nanoparticles including plant, algae, fungi, yeast, bacteria and viruses. Recently, much attention has been given on exploring fungi as potent biofactories for synthesis of silver nanoparticles since they possess numerous bioactive properties which find variety of applications in the field of biomedicine. Its use in the form of effective antimicrobial agent and disinfectant is known since time immemorial. The present chapter emphasize on the richness of endophytic fungal diversity and their role in biosynthesis of silver nanoparticles. It gives detailed overview about the mechanism of synthesis, characterization techniques involved in analysis of silver nanoparticles and biomedical application of silver nanoparticles with special reference to their antimicrobial potential.