Silver nanoparticles (AgNPs) were synthesized by a new ‘green chemistry’ method that uses sodium alginate (Na-Alg) and ascorbic acid (Vc) as the stabilizing and reducing agents, respectively. A possible mechanism involved in the reduction and stabilization of nanoparticles was investigated. The effect of reaction conditions such as pH, the addition of AgNO3 and Vc, ultrasonication treatments on the synthesis of AgNPs was investigated. The formation of AgNPs was confirmed by UV–Vis spectroscopy and characterized by transmission electron microscopy (TEM) and X-ray diffraction (XRD). The results indicated that the size and distribution of AgNPs were significantly affected by reaction parameters. XRD and TEM analysis confirmed the formation of spherical and face-centred cubic nanoparticles. They showed strong antibacterial activity against Staphylococcus aureus and Escherichia coli due to cell death caused by the increase in membrane permeability and disruption of bacterial wall integrity. It indicated that Na-Alg-AgNPs is a potential food packaging material.