An eco-friendly microbial method for synthesis of silver colloid solution with antimicrobial activity is developed using a fungal strain of Penicillium purpurogenum NPMF. It is observed that increase in concentration of AgNO₃ increases the formation of silver nanoparticle. At 5 mM concentration highly populated polydispersed nanoparticles form. Furthermore, change in pH of the reaction mixture leads to change in shape and size of silver nanoparticles. At lower pH two peaks are observed in the absorption spectra showing polydispersity of nanoparticles. However, highly monodispersed spherical nanoparticles of 8–10 nm size form with 1 mM AgNO₃ concentration at pH 8. Antimicrobial activity of nanoparticles is demonstrated against pathogenic gram negative bacteria like Escherichia coli and Pseudomonas aeruginosa, and gram positive bacteria like Staphylococcus aureus. The antimicrobial activity of silver nanoparticles obtained at different initial pH show strong dependence on the surface area and shape of the nanoparticles.