Researchers at Rice University have identified the mechanism by which silver nanoparticles kill bacteria.
Silver ions, which flow from nanoparticles when oxidized, are deadly to bacteria. However, to effective the silver must be ionized. When the possibility of ionization is taken away from silver, nanoparticles are ineffective. From some studies against anaerobic bacteria, the scientists found that ionic silver, at a concentration of about 15 parts per billion, was sufficient to kill bacteria.
For reference, the paper to which this research relates to is:
Zong-ming Xiu, Qing-bo Zhang, Hema L. Puppala, Vicki L. Colvin, Pedro J. J. Alvarez. Negligible Particle-Specific Antibacterial Activity of Silver Nanoparticles. Nano Letters, 2012