A novel chemical method has been developed for the fabrication of Ag nanoparticles-coated TiO2 nanofiber composites. The method involves dispersion of TiO2 nanofibers in silver salt solution under ultrasonication, followed by addition of sodium citrate as a reducing agent. The Ag-coated TiO2 composites were characterized by high resolution transmission electron microscopy (HRTEM), X-ray diffraction (XRD) and X-ray photoelectron microscopy (XPS). Furthermore, the photocatalytic performance was evaluated by the photocatalytic degradation of methyl orange under UV-light irradiation. It was found that the heterogeneous Ag-TiO2 composite showed a higher activity than the pure TiO2 nanofiber; the enhanced activity can be attributed to the excellent distribution and interaction of Ag nanoparticles with the TiO2 nanofiber support. A plausible mechanism for the formation of the Ag-coated TiO2 composite and reasons for the enhancement of photocatalytic activity are also discussed.