When cells of Schwanniomyces occidentalis NCIM 3459 were incubated with 1 mM tetrachloroauric acid (HAuCl4) or silver nitrate (AgNO3), cell-associated nanoparticles were obtained. Their presence was confirmed by scanning electron microscope observations. The cell-free supernatant (CFS) of the yeast mediated the synthesis of gold nanoparticles. On account of the difficulties associated with the use of cell-bound nanoparticles, further work was restricted to extracellular nanoparticles. It was hypothesized that the CFS contained thermostable biomolecule(s) that mediated metal reduction reactions. Extraction of the CFS with chloroform/methanol (2:1) and subsequent separation by preparative thin layer chromatography led to the activity-guided purification of a glycolipid. The glycolipid was hydrolyzed and the glycone (glucose) and aglycone components (palmitic acid and oleic acid) were identified by gas chromatography-mass spectrometry. The purified glycolipid mediated the synthesis of gold and silver nanoparticles that were characterized by using an X-ray diffractometer and transmission electron microscope (TEM). The extracellular nanoparticles displayed catalytic activities and reduced 4-nitroaniline to benzene-1,4-diamine. This paper thus highlights nanoparticle synthesis by a hitherto unreported yeast culture, identifies the biomolecules involved in the process, and describes a potential application of the nanostructures.