The liquid phase plasma reduction method has been applied to prepare silver nanoparticles from a solution of silver nitrate (AgNO3) using a bipolar pulsed electrical discharge system. The excited states of atomic silver, hydrogen and oxygen as well as the molecular bands of hydroxyl radicals were detected in the emission spectra. As the discharge duration increased up to 10 min, silver particle peaks produced by surface plasmon absorption were observed around 430 nm. Both the particle size and the particle numbers were observed to increase with the length of the plasma treatment time and with the initial AgNO3 concentration. Spherical nanoparticles of about 5–20 nm in size were obtained with the discharging time of 5 min, whereas aggregates of nanoparticles of about 10–50 nm in size were mainly produced with the discharging time of 20 min. The cationic surfactant of cetyltrimethylammonium bromide (CTAB) added with the CTAB/AgNO3 molar ratio of 30% was shown to inhibit nanoparticle aggregation.