The synthesis, characterization and application of biologically synthesized nanomaterials are an important aspect in nanotechnology. The present study deals with the synthesis of silver nanoparticles (Ag-NPs) using the aqueous extract of red seaweed Gelidiella acerosa as the reducing agent to study the antifungal activity. The formation of Ag-NPs was confirmed by UV-Visible Spectroscopy, X-Ray Diffraction (XRD) pattern, Scanning Electron Microscopy (SEM) and Transmission Electron Microscopy (TEM). The synthesized Ag-NPs was predominately spherical in shape and polydispersed. Fourier Transform Infra-Red (FT-IR) spectroscopy analysis showed that the synthesized nano-Ag was capped with bimolecular compounds which are responsible for reduction of silver ions. The antifungal effects of these nanoparticles were studied against Humicola insolens (MTCC 4520), Fusarium dimerum (MTCC 6583), Mucor indicus (MTCC 3318) and Trichoderma reesei (MTCC 3929). The present study indicates that Ag-NPs have considerable antifungal activity in comparison with standard antifungal drug, and hence further investigation for clinical applications is necessary.