Single crystalline silver nanoparticles have been synthesized by thermal decomposition of silver oxalate in water and in ethylene glycol. Polyvinyl alcohol (PVA) was employed as a capping agent. The particles were spherical in shape with size below 10 nm. The chemical reduction of silver oxalate by PVA was also observed. Increase of the polymer concentration led to a decrease in the size of Ag particles. Ag nanoparticle was not formed in the absence of PVA. Antibacterial activity of the Ag colloid was studied by disc diffusion method.