A highly homogeneous ZnO/Ag nanohybrid has been synthesized by a novel route, employing chitosan as mediator by purely electrostatic interaction. By employing various techniques such as powder XRD, UV-visible, IR spectroscopy and electron (SEM, TEM) microscopy, the formation of the nanohybrid has been established. The synergistic antibacterial effect of ZnO/Ag nanohybrid on Gram-positive and Gram-negative bacteria is found to be more effective, compared to the individual components (ZnO and Ag). Cytotoxicity experiments are carried out and the results are correlated to the solubility of the nanohybrid. A possible mechanism has been proposed for the antibacterial activity of ZnO/Ag nanohybrid, based on TEM studies on bacteria, carried out by employing the microtome technique and by EPR measurements on the hybrid.