Aims To synthesize silver nanoparticles (AgNPs) with cell free extract of Acinetobacter sp. and evaluate antifungal activity against planktonic and biofilm of Candida. Also, to study mechanism of antifungal action of AgNPs. Methods and Result Acinetobacter spp were screened for synthesis of AgNPs. Physio-chemical parameters were optimized to obtained monodispersed nanoparticles. Optimized nanoparticles were characterized using spectroscopic, microscopic and diffraction techniques. Antifungal and biofilm disruption activity of AgNPs (10 +/- 5 nm) were investigated against C. albicans. Mechanism of antifungal activity of nanosilver was deduced by growth curve, reactive oxygen species generation, thiol interaction and microscopic analysis. Acinetobacter sp. GWRFH 45 gave maximum synthesis of AgNPs. At optimized condition monodispersed, spherical nanoparticles were obtained which were crystalline with negative surface charge. AgNPs exhibited antifungal activity against planktonic cells and biofilm of Candida. AgNPs showed synergistic effect with amphotericin B as well as fluconazole against biofilm disruption. AgNPs were found to affect growth of Candida, generate reactive oxygen species and disrupt cellular morphology. Conclusions Cell free extract of A. calcoaceticus GWRFH 45 has ability to synthesize AgNPs. AgNPs alone and in combination with drugs have potential to inhibit C. albicans. Significance and Impact of the Study This is the first report of bacteriogenic AgNPs used in combination with antifungal drugs against Candida.