Selenium and silver have unique properties and great potential in the field of physics, chemistry and biology. The bacterial strain Pseudomonas fluorescens was isolated by using Kings'B media and Cladosporium sp. was isolated by using potato dextrose agar for soil sample collected from Andhra Pradesh coal field of Singareni. Rapid formation of stable silver and selenium nanoparticles (AgNPs; SeNPs) were observed on exposure of the microbial culture with solution of silver nitrate and sodium selenite. The nanoparticles were characterized by UV-visible spectroscopy, X-ray diffraction (XRD) and atomic force microscopy (AFM). Further, the biologically synthesized nanoparticles were found to have efficient antimicrobial activity against pathogenic bacteria, thus implying significance of the present study in production of biomedical products. AgNPs synthesized by P. fluorescens showed more antimicrobial activity than Cladosporium sp. As the AgNPs are much smaller in size, they showed effective antimicrobial activity when compared to that of SeNPs which showed less effective antimicrobial activity in both P. fluorescens and Cladosporium sp. The microbes are capable of reducing both AgNPs and SeNPs. The biological synthesis of nanoparticles is useful when compared with other physical and chemical methods as they are eco-friendly.