There is little doubt that nanomaterials will play a key role in many technologies of the future. One key aspect of nanotechnology concerns the development of reliable experimental protocols for the synthesis of nanomaterials over a range of chemical compositions, sizes and high monodispersity. In the context of the current drive to develop green technologies in materials synthesis, this aspect of nanotechnology assumes considerable importance. An attractive possibility is to use micro-organisms in the synthesis of nanoparticles. In this article, we provide a brief overview of the research efforts worldwide on the use of micro-organisms in the biosynthesis of inorganic nanoparticles, with particular emphasis on the recent and exciting results obtained at the National Chemical Laboratory, Pune on the biosynthesis of noble-metal nanoparticles using fungi and actinomycete. Some of the challenges in this emerging approach are highlighted.