Since discovery of the first antibiotic drug, penicillin, in 1928, a variety of antibiotic and antimicrobial agents have been developed and used for both human therapy and industrial applications. However, excess and uncontrolled use of antibiotic agents has caused a significant growth in the number of drug resistant pathogens. Novel therapeutic approaches replacing the inefficient antibiotics are in high demand to overcome increasing microbial multidrug resistance. In the recent years, ongoing research has focused on development of nano-scale objects as efficient antimicrobial therapies. Among the various nanoparticles, silver nanoparticles have gained much attention due to their unique antimicrobial properties. However, concerns about the synthesis of these materials such as use of precursor chemicals and toxic solvents, and generation of toxic byproducts have led to a new alternative approach, green synthesis. This eco-friendly technique incorporates use of biological agents, plants or microbial agents as reducing and capping agents. Silver nanoparticles synthesized by green chemistry offer a novel and potential alternative to chemically synthesized nanoparticles. In this review, we discuss the recent advances in green synthesis of silver nanoparticles, their application as antimicrobial agents and mechanism of antimicrobial mode of action.