Development of durable antibacterial knitted polyester fabrics by incorporation of small proportion of polyester-silver nanocomposite fibres has been attempted in this research. Polyester-silver nanocomposite fibres are blended with normal polyester fibres at three weight fractions (10, 20 and 30%). Three parameters, namely blend proportion (wt.%) of nanocomposite fibres, yarn count and knitting machine gauge, have been varied for producing 27 knitted fabrics. Knitted fabrics prepared from polyester-silver nanocomposite fibres show good to excellent antibacterial activity (65-99%) against both S. aureus and E. coli bacteria. Blend proportion of nanocomposite fibres is found to be the most dominant factor in influencing the antibacterial activity of knitted fabrics. Antibacterial activity also increases with coarser yarn count and higher knitting machine gauge. It is also found that the tightness or compactness of knitted fabrics is correlated positively with their antibacterial activity.