The increased use of silver nanoparticles (AgNP) in industrial and consumer products worldwide has resulted in their release to aquatic environments. Previous studies have mainly focused on the effects of AgNP on pelagic species, whereas few studies have assessed the risks to benthic invertebrates despite the fact that the sediments act as a large potential sink for NPs. In this study, the toxicity of sediment-associated AgNP was evaluated using the standard sediment toxicity test for chemicals provided by the Organization of Economic Cooperation and Development. The freshwater benthic oligochaete worm Lumbriculus variegatus was exposed to sediment-associated AgNP in artificial and natural sediments at concentrations ranging from 91 to 1098 mg Ag/kg sediment dry weight. Silver nitrate (AgNO3) was used as a reference compound for Ag toxicity. The measured end points of toxicity were mortality, reproduction, and total biomass. In addition, the impact of sediment-associated AgNP on the feeding rate of L. variegatus was studied in a similar test set-up as mentioned previously. The addition of AgNP into the sediment significantly affected the feeding rate and reproduction of the test species only at the highest concentration (1098 mg/kg) of Ag in the natural sediment with the lowest pH. In comparison, the addition of AgNO3 resulted in reproductive toxicity in every tested sediment, and Ag was more toxic when spiked as AgNO3 than AgNP. In general, sediments were observed to have a high capacity to eliminate the AgNP-derived toxicity. However, the capacity of sediments to eliminate the toxicity of Ag follows a different pattern when spiked as AgNP than AgNO3. The results of this study emphasize the importance of sediment-toxicity testing and the role of sediment properties when evaluating the environmental effects and behavior of AgNP in sediments.