In this study, silver nanoparticles were prepared using silver nitrate as the metal precursor, starch as protecting agent, and sodium borohydride (NaBH4) as a reducing agent by the chemical reduction method. The formation of the silver nanoparticles was monitored using ultraviolet-visible absorption spectroscopy, cyclic voltammetry, and particle size analyzer and characterized by transmission electron microscopy (TEM) and x-ray diffraction (XRD). Synthesis of nanoparticles were carried out by varying different parameters, such as reaction temperature, concentration of reducing agent, concentration of silver ion in feed solution, type and concentration of the stabilizing agent, and stirrer speed expressed in terms of particle size and size distribution. Dispersion destabilization of colloidal nanoparticles was detected by Turbiscan. It was observed that size of the starch stabilized silver nanoparticles were lower than 10 nm. The microbial activity of synthesized silver nanoparticles was examined by modified Kirby-Bauer disk diffusion method. Silver nanoparticles were tested for their antibacterial activity against Gram negative bacteria such as Escherichia coli, Pseudomonas aeruginosa, and Gram positive bacteria such as Staphylococcus aureus and Staphylococcus epidermidis. High bacterial activity was observed at very low concentrations of silver (below 1.39 mu g/ml). The antifungal activity of silver nanoparticles has been assayed against Candida albicans.