A nanocomposite of silver nanoparticles (AgNPs) embedded in chitosan (Cts) matrix was successfully synthesized by crosslinking technology. Colloidal AgNPs formed in situ by chemical reduction of silver ions in presence of Cts showed a good stability. Transmission electron micrographs, X-ray diffraction patterns, and UV-visible spectra of Ag-Cts composite particles confirmed the formation of silver nanocrystals. Fourier transform infrared spectroscopy verified the presence of Cts as a stabilizing agent surrounded AgNPs. Thermogravimetric-differential scanning calorimeter analysis revealed AgCts nanocomposite had a higher thermal stability than Cts. X-ray photoelectron spectroscopy suggested that the Ag-O bond in the nanocomposite coule lead to the tight combination between silver and Cts. Microbial experiments showed the nanocomposite had excellent and wide spectrum antibacterial properties, and were more efficient than either AgNPs or Cts alone for inactivating bacteria. Therefore, the resultant nanocomposite could be used as antimicrobial materials for medical and biological applications. (C) 2011 Wiley Periodicals, Inc. J Appl Polym Sci 120: 3180-3189, 2011