The present study is focused on the extracellular synthesis of silver nanoparticles (AgNPs) using culture supernatant of an agriculturally important bacterium, Serratia sp. BHU-S4 and demonstrates its effective application for the management of spot blotch disease in wheat. The biosynthesis of AgNPs by Serratia sp. BHU-S4 (denoted as bsAgNPs) was monitored by UV-visible spectrum that showed the surface plasmon resonance (SPR) peak at 410 nm, an important characteristic of AgNPs. Furthermore, the structural, morphological, elemental, functional and thermal characterization of bsAgNPs was carried out using the X-ray diffraction (XRD), electron and atomic microscopies, energy dispersive X-ray (EDAX) spectrometer, FTIR spectroscopy and thermogravimetric analyzer (TGA), respectively. The bsAgNPs were spherical in shape with size range of ∼10 to 20 nm. The XRD and EDAX analysis confirmed successful biosynthesis and crystalline nature of AgNPs. The bsAgNPs exhibited strong antifungal activity against Bipolaris sorokiniana, the spot blotch pathogen of wheat. Interestingly, 2, 4 and 10 µg/ml concentrations of bsAgNPs accounted for complete inhibition of conidial germination, whereas in the absence of bsAgNPs, conidial germination was 100%. A detached leaf bioassay revealed prominent conidial germination on wheat leaves infected with B. sorokiniana conidial suspension alone, while the germination of conidia was totally inhibited when the leaves were treated with bsAgNPs. The results were further authenticated under green house conditions, where application of bsAgNPs significantly reduced B. sorokiniana infection in wheat plants. Histochemical staining revealed a significant role of bsAgNPs treatment in inducing lignin deposition in vascular bundles. In summary, our findings represent the efficient application of bsAgNPs in plant disease management, indicating the exciting possibilities of nanofungicide employing agriculturally important bacteria.