The synthesis and characterization of water-soluble dispersions of Ag nanoparticles by the reduction of AgNO3 using tryptophan under alkaline synthesis conditions are reported. The Ag nanoparticle formation was very slow at low concentration and rapid at extremes. For surface modification and redox reactions, manipulating the interparticles interaction controlled the size of Ag nanoparticles aggregates. Our results suggest that the replacement of the BH4− ions adsorbed on the nanoparticle surface by tryptophan destabilizes the particles and further caused aggregation. A mechanism is proposed for the formation of silver nanoparticles by tryptophan. The experimental results are supported by theoretical calculations. The Ag nanoparticles were characterized by UV–vis absorption, dynamic light scattering and transmission electron microscopy techniques.