In this work, an endophytic fungus, Penicillium sps. was isolated from the medicinal plant, Centella asiatica. The extracellular biosynthesis of silver nanoparticles using the filtrate of cell mass of an isolated Penicillium sps was monitored and the UV-Vis absorption spectrum recorded for the solution shows the characteristic surface plasmon resonance band for silver nanoparticles in the range of 390-440 nm. The SEM studies confirmed the formation of silver particles in the size of 100 nm, a clear indication of the formation of silver nanoparticles. The silver nano particle synthesised using filtrate of endophytic fungal biomass shows the antimicrobial effect on Proteus mirabilis, Shigella dysentriae, Klebsiella pneumoniae, and Staphylococcus aureus , and fungal pathogens such as Candida albicans. Finally it is revealed that nowadays the disease causing microbes have become resistant to drug therapy. So this environmental friendly method was analyzed to be faster when compared to other chemical methods and was evaluated as the very good choice of antimicrobial agent.