Composite films with silver nanoparticles (AgNPs), obtained by reduction of AgNO3 using an environmentally friendly method (combined reduction of AgNO3 by trisodium citrate solution and heating), and agar as a polymer matrix and a capping agent were prepared by solvent casting method. The surface color of the resulting agar/AgNPs films exhibited the characteristic plasmonic effect of the silver nanoparticles, and the characteristic properties of the composite films were greatly influenced by changing the concentration of AgNPs added. Significant increase in water vapor barrier properties and surface hydrophobicity were observed with increase in the concentration of AgNPs without reduction in the mechanical strength. In addition, the agar/AgNPs films loaded with more than 1 wt% of silver nanoparticles exhibited strong antimicrobial activity against both Gram-positive (Listeria monocytogenes) and Gram-negative (Escherichia coli O157:H7) bacterial pathogens. Display omitted •Agar/silver nanoparticle composite films were prepared by reduction of AgNO3.•Film properties were dependent on the concentration of silver nanoparticles.•The composite film exhibited improved water vapor, gas barrier and mechanical properties.•The composite film with 1 and 2% of AgNPs showed strong antimicrobial activity.•The film can be potentially used as active packaging systems for preserving food quality and extending the shelf life.