A controlled and up-scalable route for the biosynthesis of silver nanopartilces (NPs) mediated by fungal proteins of Coriolus versicolor has been undertaken for the first time. The fungus when challenged with silver nitrate solution accumulated silver NPs on its surface in 72h which could be reduced to 1h by tailoring the reaction conditions. Under alkaline conditions, the reaction was much faster and could easily proceed at room temperature even without stirring. The resulting Ag NPs displayed controllable structural and optical properties depending on the experimental parameters such as pH and reaction temperatures. The average size, morphology, and structure of particles were determined by AFM, TEM, XRD and UV/Visible absorption spectrophotometry. Fourier transform infrared study disclosed that the amino groups were bound to the particles, which was accountable for the stability of NPs. It further confirmed the presence of protein as the stabilizing and capping agent surrounding the silver NPs. Experiments were conducted both with, media in which fungus was initially harvested and that of pristine fungal mycelium alone. Under normal conditions, in the case of media extracellular synthesis took place whereby other than the fungal proteins, glucose was also responsible for the reduction. In the case of fungal mycelium, the intracellular formation of Ag NPs, could be tailored to give both intracellular and extracellular Ag NPs under alkaline conditions whereby the surface S-H groups of the fungus played a major role.