Silver nanoparticles were produced from cell free extract of Penicillium fellutanum with aqueous silver nitrate. The synthesized silver nanoparticles were produced in colloidal form outside the fungal cell in the external yeast malt extract (YM) media. Visual change in the color of the extract from deep yellow to grey indicates bioreduction of silver metal ions resulting in silver nanoaprticles synthesis. The reaction mixture was characterized by UV-visible spectrometry and absorption was measured from 350 nm to 450 nm and λ-max was found to be 430 nm. Antibacterial efficacy of AgNPs was investigated using disc diffusion method against the bacteria Staphylococcus aureus, Escherichia coli, Aeromonas hydrophila and Klebsiella pneumoniae and was found to be effective antibacterial agent. Thus Penicillium fellutanum could be used as a source of silver nanoparticles, an ecofriendly alternative process for the mycosynthesis of stable AgNPs with future applications in biomedical based on its antibacterial properties.