Recombinant Escherichia coli (E. coli) bacteria expressing green fluorescent protein (GFP) was used as a model system to investigate the antimicrobial activities of Ag nanoparticles (NPs). A convenient in situ method of Ag NP synthesis using sodium borohydride, in the bacterial growth medium, was developed to produce preformed NPs for the study. Fluorescence spectroscopic and microscopic techniques allowed rapid detection of time-dependent changes in bacterial growth as well as fluorescence characteristics in the presence of Ag NPs. In addition, X-ray diffraction, UV-vis spectroscopic, and transmission electron microscopic measurements were carried out to understand the effect of Ag NPs on the bacteria. Our observations indicated that Ag NPs, above a certain concentration, not only were bactericidal but also were found to reduce the sizes of treated bacteria in comparison to untreated ones. Cell lysis of Ag NP-treated bacteria was suggested by the increased GFP fluorescence obtained in the medium. In vitro DNA-Ag NP interaction was detected by spectrophotometric analysis. However, electrophoresis studies indicated no direct effect of Ag NPs on DNA or protein profiles.