In this paper, we demonstrate how a simple fabrication route, i.e., pressureless sintering of mechanically mixed powders can be employed to develop hydroxyapatite (HAp, Ca(10)(PO(4))(6)(OH)(2))-silver (Ag) bioceramic composites with superior combination of physical (hardness, toughness), non-cytotoxicity, cytocompatiblity and anti-microbial property. The densification results show that such composites can be sintered at 1200 degrees C for 2 h near to theoretical density (>98% rho(th).) An important observation is that the dissociation of HAp phase can be prevented during sintering up to 1300 degrees C for 2 h in HAp-10 wt% Ag composites. The stability of HAp in presence of silver is discussed in reference to the results obtained using XRD, FTIR and Raman spectroscopy. The hardness values of the composites are comparable (approximately 6.5 GPa) to that of pure HAp, despite of the presence of softer Ag particles. The sintered composites exhibit modest crack growth resistance property and their toughness varies in the range of 0.9-1.2 MPa m(0.5), depending on sintering temperature. For selected samples, the in vitro characterization was performed using mouse fibroblast (L929) and human osteosarcoma (MG63) cell lines. The combination of biochemical assays (MTT, ALP and osteocalcin) confirm that HAp-10 wt% Ag biocomposites have comparable or even better cellular viability, osteogenic differentiation and bone mineralization as well as osteoinduction property. Antibacterial experiments involving gram-negative bacteria, Escherichia coli confirm excellent bactericidal property of HAp-10 wt% Ag composites, sintered using mechanically mixed powders.