Silver nanoparticles in the size range of 2–5 nm were synthesized extracellularly by a silver-tolerant yeast strain MKY3, when challenged with 1 mM soluble silver in the log phase of growth. The nanoparticles were separated from dilute suspension by devising a new method based on differential thawing of the sample. Optical absorption, transmission electron microscopy, x-ray diffraction and x-ray photoelectron spectroscopy investigations confirmed that metallic (elemental) silver nanoparticles were formed. Extracellular synthesis of nanoparticles could be highly advantageous from the point of view of synthesis in large quantities and easy downstream processing.