The alarming growth of vancomycin resistant Staphylococcus aureus (VRSA) is the main driving force for the development of a new methodology to restore the antibacterial activity against VRSA. In the present study, gold nanoparticles were biologically synthesized using the non pathogenic fungus Trichoderma viride at room temperature. The extremely stable gold nanoparticles were characterized by using UV-vis spectrophotometer. FTIR, TEM. EDX and XRD. The nanoparticles exhibit maximum absorbance at 520 rim in the UV spectrum. The functional group of protein molecule was identified using FTIR. The presence of elemental gold was confirmed by EDX analysis. The TEM micrograph showed the presence of vancomycin bound gold nanoparticles (VBGNP) in abundance on the cell wall surface of VRSA. The antibacterial mechanism may be due to VBGNP binding non-specifically to transpeptidases, instead of terminal peptidases of the glycopeptidyl precursors on the cell surface of test strain. The VBGNP showed significant antibacterial activity against Escherichia coli strain. (C) 2010 Elsevier Ltd. All rights reserved.