Biosynthesis of nanoparticles is an exciting recent nanoparticle synthesis method. New enzymatic approaches using fungi in the synthesis of nanoparticles of metals/metal sulfides both intra and extra cellularly have been demonstrated. Further physical methods such as vapour deposition, lithography, radiolysis, etc., and chemical methods such as reduction by borohydrate or citrate, etc., adopted for nanoparticles synthesis seems hazardous, eco-unfriendly, cumbersome and found to yield big particles. Hence there is a need for reliable ecofriendly and economic synthesis approach to the manufactue of nanomaterials. By screening more than two hundred cultures of fungi and actinomycetes for metal salt reduction it has been found that fungi and actinomycetes can carry out oxidation reduction reactions. It is reported that intracellular biosynthesis of inorganic nanoparticles (Au,Ag,CdS) can be carried out using endophytic fungus, Verticillium Verticillium.sp., Alkalotolerant Actinomycete and Rhodococcus Rhodococcus.sp. Biomass-nanoparticle composite can be produced by the fallowing procedure. Mycelial (cell) mass is separated from culture broth and is suspended in sterile water along with aq. solution of metal salt ( HAuCl4, AgNO3 CdSO4 ) under shaking condition at ambient conditions. After few hours, it is found that the fungal mycelial (cell) mass develops a distinct characteristic colour. The solution remains colourless after filtration. The resulting nanoparticles are found suitable for bio-inorganic composite film, in catalysis and other electronic applications. Biosynthesis approach have also been reported to other chemical compositions such as oxides, nitrides etc. and to modulate the size and shape of the biosynthesized nanomaterials. A single-step method involving the use of the multifunctional molecule, 4-hexadecylaniline, has been developed for the synthesis of gold and highly catalytically active Pt nanoparticles of different sizes in organic media. This method has been modified to yield nanorods, nanowires and nanotapes of organically dispersible gold nanostructures with exciting application potentials.