With the aim of preparing stable nanofluids for heat exchange applications and to study the effect of surfactant on the aggregation of nanoparticles and thermal diffusivity, stable silver colloids were synthesized in water by a green method, reducing AgNO₃ with fructose in the presence of poly-vinylpyrollidone (PVP) of various molecular weights. A silver nanopowder was precipitated from the colloids and re-dispersed at 4 vol% in deionized water. The Ag colloids were characterized by UV-visible spectroscopy, combined dynamic light scattering and ζ-potential measurements, and laser flash thermal diffusivity. The Ag nanopowders were characterized by scanning electron microscopy and thermal gravimetric analysis. It was found that the molecular weight of PVP strongly affects the ζ-potential and the aggregation of nanoparticles, thereby affecting the thermal diffusivity of the obtained colloids. In particular, it was observed that on increasing the molecular weight of PVP the absolute value of the ζ-potential is reduced, leading to increased aggregation of nanoparticles. A clear relation was identified between thermal diffusivity and aggregation, showing higher thermal diffusivity for nanofluids having higher aggregation. A maximum improvement of thermal diffusivity by about 12% was found for nanofluids prepared with PVP having higher molecular weight.