Silver nanoparticles (AgNPs) find use in different biomedical applications including wound healing and cancer. We propose that the efficacy of the nanoparticles can be further augmented by using these particles for gene delivery applications. The objective of this work was to engineer biofunctionalized stable AgNPs with good DNA binding ability for efficient transfection and minimal toxicity. Herein, we report on the one-pot facile green synthesis of polyethylene glycol (PEG) stabilized chitosan-g-polyacrylamide modified AgNPs. The size of the PEG stabilized AgNPs was 38 ± 4 nm with a tighter size distribution compared to the unstabilized nanoparticles which showed bimodal distribution of particle sizes of 68 ± 5 nm and 7 ± 4 nm. To enhance the efficiency of gene transfection, the Arg-Gly-Asp-Ser (RGDS) peptide was immobilized on the silver nanoparticles. The transfection efficiency of AgNPs increased significantly after immobilization of the RGDS peptide reaching up to 42 ± 4% and 30 ± 3% in HeLa and A549 cells, respectively, and significantly higher than 34 ± 3% and 23 ± 2%, respectively, with the use of polyethyleneimine (25 kDa). These nanoparticles were found to induce minimal cellular toxicity. Differences in cellular uptake mechanisms with RGDS immobilization resulting in improved efficiency are elucidated. This study presents biofunctionalized AgNPs for potential use as efficient nonviral carriers for gene delivery with minimal cytotoxicity toward augmenting the therapeutic efficacy of AgNPs used in different biomedical products.