Poly(dimethylsiloxane) PDMS is a chemically and biologically inert material which has been used extensively for micro-fluidic channels, tissue culture and biomedical applications. This polymer is also transparent, non-conductive and flexible. Embedding nanoparticles in PDMS matrix would lead to new advanced materials where collective properties of both nanoparticles and polymer can be utilized for various diverse applications such as gas separation membrane, optoelectronic devices etc. The general approach of dispersing as prepared nanoparticles suffers from poor dispersibility in polymer matrix and requires multiple steps. We have developed simple one step synthesis of silver nanoparticles embedded PDMS films which involves mixing of silver salt in the siloxane precursor followed by curing. The curing agent not only cross links the siloxane precursor but also reduces the silver benzoate to silver nanoparticles. The in-situ generated nanoparticles are uniformly distributed in the polymer matrix and were characterized by UV- visible spectroscopy, Transmission electron microscopy and X-ray photoemission spectroscopy. This nanocomposite material shows good anti-microbial properties making it superior to PDMS film for biomedical application and it also has better tolerance to wide range of organic solvents for use in petrochemical industry.