Green synthesis of nanoparticles is eye catching area of nanoscience and nanotechnology. It involve development of clean, biocompatible, non-toxic and eco-friendly methods for nanoparticles synthesis as compared to conventional method like physical and chemical which are often toxic. In the  present scenario variety of nanoparticles with well-defined chemical compositions, sizes and morphology have been synthesized using different microorganisms and their applications in various cutting-edge technological areas have been explored. This review highlights the recent developments of the biosynthesis mechanisms of different types of nanoparticles using bacteria. Nanoparticles have been used in diagnosis, treatment, drug delivery, medical device coating, wound dressings, medical textiles, contraceptive devices, anti-fungal, anti-inflammatory etc. Future prospects for synthesis of nanoparticles using bacteria have also been discussed.