Nanoparticles are formed on the inner surface of the fungal/actinomycete cell and not in solution. This happens by trapping of ions on the surface of fungal/ actinomycete cell and ions are reduced by enzyme (reductases) present in the cell wall or in the cytoplasmic membrane. Extracellular Biosynthesis of Inorganic (Au,Ag and CdS) nanoparticles occus by using plant pathogenic fungus such as Fusarium oxysporum, Extremophilic actinomycete, thermomonospora sp. etc., is carried out as fallows. Mycelial (cell) mass, separated from culture broth, is suspended in sterile water along with aq. solution of metal salt (HAuCl4, AgNO3 CdSO4) under shaking at ambient conditions. After few hours, the fungal mycellial (cell) mass develops distinct characteristic colour. Biomass remains colourless after filtration and the solution contains metal nanoparticle. These nanoparticles are suitable for homogeneous catalysis and can be immobilized in different matrices or in thin film form for optoelectronic and other electronic application.