Lingzhi or Reishi medicinal mushroom, Ganoderma lucidum, has been used over the ages as highly medicinal herb in the Orient. Many useful properties of this fungus are still being studied; we report here a new facet of this "elixir of life" as a mycosource for synthesis of metal nanoparticles. Treating the extracellular suspension filtrate of the mycelia of G. lucidum with silver nitrate reduces the metal ions to nanoparticles. Optical detection followed by confirmation through spectroscopic analysis suggests that this fungus can be used for the purpose of safe and sure synthesis of silver nanoparticles, demand for which is growing day by day in all fields of human life. LM-20 analysis of these G. lucidum-synthesised nanoparticles reveals the polydispersity and distribution of silver nanoparticles in the range of 10-70 nm with an average size of 45 nm and a concentration of 0.37 x 108 particles/mL. FT-IR spectrum confirms the stability of these nanoparticles due to presence of amide linkages and protein capping. These nanoparticles have shown strong bactericidal activity against test pathogens Staphylococcus aureus and Escherichia coli, and also exhibited their efficiency in enhancing the activity of the synthetic antibiotic tetracycline. The method of synthesising silver nanoparticles and its bactericidal effect discussed here can be used for environment-friendly and economically feasible production for different applications where chemically synthesized nanoparticles cause undesirable effects.