A simple, green method was developed for the synthesis of silver nanoparticles (AgNPs) by using Dialdehyde Chitosan (D-CTS) as the reducing and stabilizing agent. D-CTS was prepared from the oxidation of chitosan by sodium periodate, and its degree of oxidation was determined by 1H-NMR and elemental analysis. The synthesized AgNPs were characterized by UV-Vis spectroscopy, dynamic light scattering (DLS), Fourier-transform infrared spectroscopy (FT-IR), X-ray diffraction (XRD), and scanning electron microscopy (SEM). The morphology and size distribution of the AgNPs were found to vary with the dialdehyde content of D-CTS and the pH value of the reaction solution. FT-IR spectra revealed that the aldehyde groups and the amino groups were the major agents that stabilized the AgNPs. XRD results indicated the presence of nano-silver having a face-centered cubic structure. SEM results showed that nano-silver particles of 30 to 40 nm in size were homogeneously dispersed in the solution. The possible mechanism of D-CTS on the reduction and stabilization of AgNPs may be due to the formation of four-coordinate complexes. The synthesized AgNPs remained stable for more than three months.