Silver nanoparticles are of great interest for use as antimicrobial agents. Studies aimed at producing potent nano-silver biocides have focused on manipulation of particle size, shape, composition and surface charge. Here, we report the cell penetrating peptide catalyzed formation of antimicrobial silver nanoparticles in N,N-dimethylformamide. The novel nano-composite demonstrated a distinctly enhanced biocidal effect toward bacteria (gram-positive Bacillus subtilis, gram-negative Escherichia coli) and pathogenic yeast (Candida albicans), as compared to triangular and extremely small silver nanoparticles. In addition, a satisfactory biocompatibility was verified by a haemolysis test. Our results provide a paradigm in developing strategies that can maximize the silver nanoparticle application potentials while minimizing the toxic effects.