In the present study, the extracellular phycofabrication (synthesis by algae) of silver nanoparticles was demonstrated using algae i.e. Spirogyra sp. recovered from the fresh water. The reduction of silver ions present in the aqueous solution of silver sulphate (Ag2SO4) was done by the cell filtrate of Spirogyra sp. leading to the synthesis of silver nanoparticles. Phycofabrication of silver nanoparticles was confirmed by using characterization tools like UV-Vis spectrophotometer, FTIR, TEM and NTA. The resulting silver nanoparticles were spherical in shape, in the range of 40-80 nm and capped with proteins. Through the experimental studies, it was found that temperature, pH and salt concentration affects the rate of phycofabrication of silver nanoparticles. Antibacterial study of phycofabricated silver nanoparticles was assessed against human pathogenic bacteria. These silver nanoparticles showed better antibacterial activity against gram positive bacteria i.e. Staphylococcus aureus (ATCC-25923) (13 mm) as compared to Gram negative bacteria i.e. Escherichia coli JM-103 (ATCC-39403) (11 mm). This is the first report of synthesis of silver nanoparticles by Spirogyra sp < /em>. using Ag2SO4 as a salt. Extracellular phycofabrication of silver nanoparticles by Spirogyra sp. was found be easy, simple and eco-friendly method.