Silver nanoparticles have been synthesized by chemical reduction of silver salt solution, characterized by its surface plasmon resonance peak in absorption spectra at 425 nm. The studies were carried out by scanning electron microscopy (SEM), transmission electron microscopy (TEM), energy dispersive X-ray analysis (EDX) and Fourier transform infrared spectroscopy (FTIR). The size and size distribution of these nanoparticles have also been examined using particle size analyzer, the average size of the particles is found to lie between 5 nm and 50 indicated the presence of micrometer-size conglomerates composed of much smaller particles. Chemical analysis performed with the use of EDX revealed that the powder contains about 72% of silver. The findings support the size and shape of the synthesized nano silver particles. These nanoparticles have been applied to cotton, by usual exhaustion process and manifested the improved microbial resistance. The dyeing behavior of the treated fabrics with reactive yellow 2 has been studied and the build-up of dye, measured as color strength in terms of K/S values. The higher K/S values are obtained when the Ag nano is anchored in the fiber matrix. Improved color strength with good wash and light fastness is also obtained after treatment of fabrics with nanoparticles.