Present study utilised textile soil isolated bacterium Pseudomonas stutzeri to synthesise extracellular silver nanoparticles (AgNPs) under optimised conditions. The synthesised AgNPs were characterised using ultraviolet-visible spectroscopy, Fourier transform infrared spectroscopy (FTIR) and transmission electron microscopy (TEM). Optimisation showed AgNPs synthesis within 8 h using 2mM Ag nitrate at pH9, temperature 80°C and maximum absorbance toward 400 nm. TEM analysis revealed spherical shape AgNPs and reduction in size upto 8 nm was observed under optimised conditions. FTIR spectra confirmed presence of proteins bound to AgNPs act as reducing agent. AgNPs showed strong antibacterial activity against multi-drug resistant (MDR) Escherichia coli and Klebsiella pneumoniae as demonstrated by disc diffusion and colony forming unit assays. Zone of inhibition increased with increasing concentration of AgNPs with maximum of 19 mm against E. coli and 17 mm against K. pneumoniae at concentration of 2 μg/disc. Furthermore, AgNPs did not show any cytotoxic effects on human epithelial cells as demonstrated by 3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyl tetrazolium bromide assay even at 2 μg/ml concentration of AgNPs. The results of the present study suggest that AgNPs can be synthesised rapidly under optimised conditions and show strong antimicrobial property against MDR pathogens without having toxicity effect on human epithelial cells.