The capacity of nanosilver (Ag nanoparticles) to destroy infectious micro-organisms makes it one of the most powerful antimicrobial agents, an attractive feature against "super-bugs" resistant to antibiotics. Furthermore, its plasmonic properties facilitate its employment as a biosensor or bioimaging agent. Here, the interaction of nanosilver with biological systems including bacteria and mammalian cells is reviewed. The toxicity of nanosilver is discussed focusing on Ag+ ion release in liquid solutions. Biomedical applications of nanosilver are also presented capitalizing on its antimicrobial and plasmonic properties and summarizing its advantages, limitations and challenges. Though a lot needs to be learned about the toxicity of nanosilver, enough is known to safely use it in a spectrum of applications with minimal impact to the environment and human health.