This study describes the synthesis and characterization of silver nanoparticles and nanocomposite material using agar extracted from the red alga Gracilaria dura. Characterization of silver nanoparticles was carried out based on UV-Vis spectroscopy (421 nm), transmission electron microscopy, EDX, SAED and XRD analysis. The thermal stability of agar/silver nanocomposite film determined by TGA and DSC analysis showed distinct patterns when compared with their raw material (agar and AgNO3). The TEM findings revealed that the silver nanoparticles synthesized were spherical in shape, 6 nm in size with uniform dispersal. The synthesized nanoparticles had the great bactericidal activity with reduction of 99.9% of bacteria over the control value. The time required for synthesis of silver nanoparticles was found to be temperature dependent and higher the temperature less the time for nanoparticles formation. DSC and XRD showed approximately the same crystalline index (CIDSC 0.73). (C) 2011 Elsevier Ltd. All rights reserved.