Polymer-encapsulated silver nanoparticles were synthesized and sterically stabilized by a new core-shell type system consisting of poly(S-alt-MA)-graft- PMMA copolymer that acts as a scaffold for the synthesis of size confined nanoparticles. The graft copolymer is synthesized via ambient temperature ATRP using the CuBr/PMDETA catalytic system at ambient temperature. The graft copolymer is hypothesized to function as a scaffold with the anhydride part interacting strongly with the silver ions, while the PMMA graft functions as a polymer brush that stabilizes the dispersion and prevents the particle aggregation due to a 'polymer brush effect'. UV absorption and TEM studies confirm that the synthesized silver composite particles have a core-shell structure. © 2008 WILEY-VCH Verlag GmbH & Co. KGaA.