Central composite design was chosen to determine the combined effects of four process variables (AgNO3 concentration, incubation period, pH level and inoculum size) on the extracellular biosynthesis of silver nanoparticles (AgNPs) by Streptomycesviridochromogenes. Statistical analysis of the results showed that incubation period, initial pH level and inoculum size had significant effects (P0.05) on the biosynthesis of silver nanoparticles at their individual level. The maximum biosynthesis of silver nanoparticles was achieved at a concentration of 0.5% (v/v) of 1 mM AgNO3, incubation period of 96 h, initial pH of 9 and inoculum size of 2% (v/v). After optimization, the biosynthesis of silver nanoparticles was improved by approximately 5-fold as compared to that of the unoptimized conditions. The synthetic process of silver nanoparticle generation using the reduction of aqueous Ag+ ion by the culture supernatants of S. viridochromogenes was quite fast, and silver nanoparticles were formed immediately by the addition of AgNO3 solution (1 mM) to the cell-free supernatant. Initial characterization of silver nanoparticles was performed by visual observation of color change from yellow to intense brown color. UV-visible spectrophotometry for measuring surface plasmon resonance showed a single absorption peak at 400 nm, which confirmed the presence of silver nanoparticles. Fourier Transform Infrared Spectroscopy analysis provided evidence for proteins as possible reducing and capping agents for stabilizing the nanoparticles. Transmission Electron Microscopy revealed the extracellular formation of spherical silver nanoparticles in the size range of 2.15–7.27 nm. Compared to the cell-free supernatant, the biosynthesized AgNPs revealed superior antimicrobial activity against Gram-negative, Gram-positive bacterial strains and Candida albicans.