In the present investigation, the silver-bionanocomposite with fcc structured Ag-nanocrystals was synthesized using the fungus, Cylindrocladium floridanum through a novel, environmentally benign biological process. Silver-bionanocomposite was systematically characterized by UV-Vis spectroscopy, XRD, SEM, EDX, and TEM techniques. TEM analysis of mycelia confirmed the presence of silver nanoparticles (AgNPs) on the outer surface of the cell wall and inner of cytoplasmic membrane of the fungus, when cultured in aqueous solution of AgNO(3) at 30 degrees C for a period of 7 days in static condition. Additionally, it was observed that bionanocomposite with AgNPs functions as an efficient heterogeneous catalyst in the degradation of 4-nitrophenol (4-NP) to 4-aminophenol (4-AP), in the presence of reducing agent, sodium borohydride which was reflected by UV-Vis spectra of the catalytic reaction kinetics. This is the first report of the silver-bionanocomposite using fungus, Cy. floridanum, heterogeneously catalyzing the reduction of a toxic pollutant, 4-NP to 4-AP. (C) 2011 Elsevier Ltd. All rights reserved.