Bio-directed synthesis of metal nanoparticles is gaining importance due to their biocompatibility, low toxicity and eco-friendly nature. We used culture supernatant of Pseudomonas aeruginosa strain BS-161R for the simple and cost effective green synthesis of silver nanoparticles. The reduction of silver ions occurred when silver nitrate solution was treated with the Pseudomonas aeruginosa culture supernatant at room temperature. The nanoparticles were characterized by UV-visible, TEM, EDAX, FT-IR and XRD spectroscopy. The nanoparticles exhibited an absorption peak around 430 nm, a characteristic surface plasmon resonance band of silver nanoparticles. They were mono-dispersed and spherical in shape with an average particle size of 13 nm. The EDAX analysis showed the presence of elemental silver signal in the synthesized nanoparticles. The FT-IR analysis revealed that the protein component in the form of enzyme nitrate reductase and the rhamnolipids produced by the isolate in the culture supernatant may be responsible for reduction and as a capping material. The XRD spectrum showed the characteristic Bragg peaks of 111, 200, 220 and 311 facets of the face centered cubic silver nanoparticles and confirms that these nanoparticles are crystalline in nature. The prepared silver nanoparticles exhibited strong antimicrobial activity against gram-positive, gram-negative and different Candida species at concentrations ranging between 4 and 32 μg ml(-1).