Currently the applications of silver nanoparticles (Ag NPs) are gaining overwhelming response due to the advancement of nanotechnology. However, only limited information is available with regard to their toxicity mechanism in different species. It is very essential to understand the complete molecular mechanism to explore the functional and long term applications of Ag NPs. Ag NPs could be toxic at cellular, subcellular, biomolecular, and epigenetic levels. Toxicity effects induced by Ag NPs have been evaluated using numerous in vitro and in vivo models, but still there are contradictions in interpretations due to disparity in methodology, test endpoints and several other model parameters which needs to be considered. Thus, this review article focuses on the progressive elucidation of molecular mechanism of toxicity induced by Ag NPs in various in vitro and in vivo models. Apart from these, this review also highlights the various ignored factors which are to be considered during toxicity studies.