Targeting cancer cells with small nanoparticles is a novel and promising approach to cancer therapy. Breast cancer is the most common cancer afflicting women worldwide. In the present study, silver nanoparticles (AgNPs) were synthesized using the aqueous extract of the marine alga Capsosiphon (C.) fulvescens, and the cytotoxicity and anti-cancer activities of the nanoparticles against MCF-7 breast cancer cells were analyzed. Nanoparticle formation was confirmed by solution color change and UV-Vis spectroscopy. The size and distribution of the C. fulvescens-biosynthesized silver nanoparticles (CfAgNPs) were then examined using various analytical methods; the particle size was around 20-22 nm and spherical in shape with no agglomeration. Cytotoxicity analysis revealed that the inhibitory concentration (IC) of CfAgNPs was 50 μg/ml. MCF-7 cell viability decreased with increasing concentrations of CfAgNPs. MCF-7 cells were evaluated for morphological changes before and after treatment with the CfAgNPs; cells treated with C. fulvescens aqueous algal extract (without CfAgNPs) showed irregular confluent aggregates with round polygonal cells, similar to the untreated control. Tamoxifen- (TMX) and CfAgNPs-treated cells show significant morphological changes. An apoptosis study was conducted using 4',6-diamidino-2-phenylindole (DAPI) staining, in which CfAgNP-treated MCF-7 cells generated bright blue fluorescence and shortened, disjointed chromatin was evident; control cells displayed less bright fluorescence. Flow cytometry analysis revealed that the percentage of cells in late apoptosis was high following treatment with TMX (77.2%) and CfAgNP (74.6%). A novel anti-cancer agent, developed by generating silver nanoparticles from C. fulvescens extract, showed strong cytotoxic activity against MCF-7 cells.