Microorganisms offer an alternative green and scalable technology for the synthesis of value added products. Fungi secrete high quantities of bioactive substances, which play dual-functional roles as both reducing and stabilizing agents in the synthesis of colloidal metal nanoparticles such as silver nanoparticles, which display potent antimicrobial properties that can be harnessed for a number of industrial applications. The aim of this work was the production of silver nanoparticles using the extracellular cell free extracts of Phanerochaete chrysosporium, and to evaluate their activity as antimicrobial and antibiofilm agents. The 45–nm diameter silver nanoparticles synthesized using this methodology possessed a high negative surface charge close to −30 mV and showed colloidal stability from pH 3–9 and under conditions of high ionic strength ([NaCl] = 10–500 mM). A combination of environmental SEM, TEM, and confocal Raman microscopy was used to study the nanoparticle-E. coli interactions to gain a first insight into their antimicrobial mechanisms. Raman data demonstrate a significant decrease in the fatty acid content of E. coli cells, which suggests a loss of the cell membrane integrity after exposure to the PchNPs, which is also commensurate with ESEM and TEM images. Additionally, these biogenic PchNPs displayed biofilm disruption activity for the eradication of E. coli and C. albicans biofilms.