In this article, silver-polyethylene oxide (Ag/PEO) biocompatible nanocomposite (BCNC) were successfully green synthesized by mixture containing low MW PEO, silver nitrate and by UV-irradiation at room temperature. The initially broad and asymmetric surface plasmon resonance (SPR) band was narrowed and blue-shifted as the exposure time to UV light was increased. Samples illuminated up to 3 h have an average particle size near 12.0 nm; a decrease to 10.0 nm was observed for longer exposure times up to 24 h. The asymmetric SPR band was due to particle aggregation; higher irradiation times led to a uniform particle distribution within the polymer matrix. The synthesized colloids and thin films have potent antibacterial activity toward gram-negative bacterium Escherichia coil (E. coli), and this activity is completely strong. The concentration of silver leading to a complete inhibition of bacteria growth was revealed as low as at 0.50 microg x ml(-1) and found much lower compared to other reports. Thus Ag/PEO BCNC could be suitable to antimicrobial applications and medical devices.