In this investigation, an ecofriendly method for the synthesis of silver nanoparticles (AgNPs) using biodegradable gelatin as a stabilizing agent is reported. Here, we prepared thermosensitive silver nanocomposite hydrogels composed of gelatin and N-isopropylacrylamide. In this green process AgNPs were formed from Ag+ ions and reduced with leaf [Azadirachta indica (neem leaf)] extracts, resulting in a hydrogel network. The Ag0 nanoparticles affect the hydrogel strength and improved the biological activity (inactivation effect of bacteria) of the biodegradable hydrogels. The resulted hydrogel structure, morphology, thermal, swelling behavior, degradation, and antibacterial properties were systematically investigated. The biodegradable thermosensitive silver nanocomposite hydrogels developed were tested for antibacterial activities. The results indicate that these biodegradable silver nanocomposite hydrogels are suitable potential candidates for antibacterial applications. © 2013 Wiley Periodicals, Inc.