Chitosan–silver (CS–Ag) nanocomposite materials were synthesized by a simple chemical method. The synthesized CS–Ag nanocomposite contains 20 wt% silver. Silver nanoparticles were synthesized by chemical reduction method as well. The CS–Ag nanocomposite was characterized using Field emission scanning electronic microscope (FESEM), X-ray diffraction (XRD) and Fourier transform infrared spectroscopy (FTIR). The XRD pattern indicated the presence of both silver and chitosan in the nanocomposite. It is observed from the XRD pattern of silver that it is of cubic structure. The spherical morphology of silver nanoparticles was confirmed from the FESEM image. FTIR spectroscopy was used for the structural elucidation. CS–Ag nanocomposite exhibits good antimicrobial and antitumor properties.