In a recent report, we have presented the layer-by-layer (LBL) assembly of a biomimetic nanostructured composite from Na(+)-montmorillonite clay nanosheets and poly(diallylmethylammonium chloride) (Tang, Z.; Kotov, N.; Magonov, S.; Ozturk, B. Nat. Mater. 2003, 2, 413). The structure, deformation mechanism, and mechanical properties of the material are very similar to those of natural nacre and lamellar bones. This fact prompts further investigation of these composites as potential bone implants. LBL assembly affords preparation of multifunctional composites, and here we demonstrate that not only mechanical strength, but also antibacterial activity, can be introduced in these implantable materials by alternating clay layers with starch-stabilized silver nanoparticles. The resulting composite showed excellent structural stability with no detectable levels of silver lost over a 1 month period. Evaluation of the antibacterial properties showed almost complete growth inhibition of E. coli over an 18 h period. The amount of silver eluted from the LBL composite over a 1 month period was determined to be only 0.5-3.0 microg/L. This concentration of silver did not prevent the growth of the mammalian tissue cultures. The LBL composite has shown biocompatibility with the human osteoblast cell line.