We synthesized tiny stable silver nanoparticles (2.6 +/- 1.1 nm) and used its small surface area and functional groups to control single molecule detection (SMD) volumes on single nanoparticles. These new approaches allowed us to develop intrinsic single molecule nanoparticle optical biosensors (SMNOBS) for sensing and imaging of single human cytokine molecules, recombinant human tumor necrosis factor-alpha (TNFalpha), and probing its binding reaction with single monoclonal antibody (MAB) molecules in real-time. We found that SMNOBS retained their biological activity over months and showed exceptionally high photostability. Our study illustrated that smaller nanoparticles exhibited higher dependence of optical properties on surface functional groups, making it a much more sensitive biosensor. Localized surface plasmon resonance spectra (LSPRS) of SMNOBS showed a large red shift of peak wavelength of 29 +/- 11 nm, as single TNFalpha molecules bound with single MAB molecules on single nanoparticles. Utilizing its LSPRS, we quantitatively measured its binding reaction in real time at single molecule (SM) level, showing stochastic binding kinetics of SM reactions with binding equilibrium times ranging from 30 to 120 min. SMNOBS exhibited extraordinarily high sensitivity and selectivity, and a notably wide dynamic range of 0-200 ng/mL (0-11.4 nM). Thus, SMNOBS is well suited for the fundamental study of biological functions of single protein molecules and SM interactions of chemical functional groups with the surface of nanoparticles, as well as development of effective disease diagnosis and therapy.