This paper deals with the synthesis of omega-mercaptoundecanoic acid (MUA) capped silver nanoparticles (NPs) with an average size of 15nm by citrate reduction technique and spectroscopic investigation of S-Ag interaction. We have studied the interaction of thiol with silver NPs in aqueous medium by employing UV-vis, Raman, FT-IR, and photoluminescence spectroscopy. The shifting of silver surface plasmon band in the UV-vis spectra shows the stabilization of the silver nanoparticles by MUA. The disappearance of S-H stretching in both the FT-IR and Raman spectra and the shifting of the NMR signals of the protons in close proximity to the metal center supported the existence of the S-Ag interaction in MUA capped silver NPs. The morphology of the thiol protected silver NPs was investigated by transmission electron microscopy (TEM) and was found to be distinct and spherical entities.