Silver nanoparticles were synthesized using a novel two step electrochemical process. The process consisted of electrochemically-induced deposition of a chitosan film followed by reduction of aqua silver ions , formingsilver nanoparticles. The chitosan film was synthesized by depositon of chitosan from acidic solution at reducing potentials. The process was optimized by changing parameters including voltage, time, pH and number of deposition cycles. The morphology of the initial chitosan film was investigated using optical microscopy. Silver was deposited from silver nitrate solution at varying potentials from -0.5V to -2V vs Ag/AgCl reference electrode. The size and distribution of silver was investigated using scanning electron microscopy (SEM). The chitosan hydrogel film formed was found to be sufficiently conductive such that the nanoparticles nucleated at thinner spots of the film. It was found that less negative potential insured better surface coverage and even size distribution of silver nanoparticles. The silver nanoparticles were tested for activity using cyclic voltammetry. The result showed that metallic silver was formed and was active in oxygen reduction reaction.