Spectroscopic, microscopic and size dependent antibacterial efficiency of Ag nanoparticles (NPs) synthesized by green approach were studied. Five different samples of Ag NPs having average sizes in the range of ~14 to ~21 nm were synthesized using Psidium guajava (Guava) leaf extract (0.25ml, 0.5ml, 1ml, 2ml, 4ml, respectively) in 50ml aqueous AgNO3 solution of molar concentration of 1mM. The sizes of the NPs were found to increase with increase in concentration of leaf extract. Such increase in NP size is mainly due to the increase in biomolecules, in the solution, that transforms the Ag ions to Ag NPs. Spectroscopic and microscopic properties of as-synthesized Ag NPs were obtained by characterizing the prepared samples using suitable and affordable methodologies. These Ag NPs showed significant size dependent antibacterial effect. The minimum inhibitory concentration and minimum lethal concentration of the sample showing highest zone of inhibition against Escherichia coli (E. coli) was determined as 40 μg/ml and 80 μg/ml, respectively. Percentage of survivability was also measured through viable plate count. The smallest Ag NPs (average size ~14 nm) considered here produced the best antibacterial activity against the tested E. coli compared to Ag NPs having larger sizes at identical bacterial concentration. The enhanced antibacterial efficiency for smaller Ag NPs is mainly due to larger surface area-to-volume ratio of smaller NPs. The probable mechanism of bio-reduction of silver ions and formation of Ag NPs has also been well explained, which justifies the result obtained in this work.