There has been significant progress in the biological synthesis of nanomaterials. However, the molecular mechanism of synthesis of such bio-nanomaterials remains largely unknown. Here, we report the extracellular synthesis of crystalline silver nanoparticles (AgNPs) by using Morganella sp., and show molecular evidence I of silver resistance by elucidating the synthesis mechanism. The AgNPs were 20 +/- 5 nm in diameter and were highly stable at 1 room temperature. The kinetics of AgNPs formation was investigated. Detectable particles were formed after on hour of reaction, and their production remained exponential up to 18 h, and saturated at 24 h. Morganella sp. was found to be highly resistant to silver cations and was able to grow in the presence of more than 0.5 mm AgNO3. Three gene homologues viz. silE, silP and silS were identified in silver-resistant Morganella sp. The homologue of silE from Morganella sp. showed 99% nucleotide sequence similarity with the previously reported gene, silE, which encodes a periplasmic silver-binding protein. The homologues of silP and silS were also highly similar to previously reported sequences. Similar activity was totally absent in closely related Escherichia coli; this suggests that a unique mechanism of extracellular AgNPs synthesis is associated with silver-resistant Morganella sp. The molecular mechanism of silver resistance and its gene products might have a key role to play in the overall synthesis process of AgNPs by Morganella sp. An understanding of such biochemical mechanisms at the molecular level might help in developing an ecologically friendly and cost-effective protocol for microbial AgNPs synthesis.