The long-term success of a biomaterial used during surgery may be compromised by infection. A possible effective solution is to make the biomaterial osteoconductive and antibacterial. A range of silver-substituted hydroxyapatite (AgHA) of up to 1.1 wt. % of Ag was synthesized. AgHA displayed a rod-like morphology of dimensions ∼50 nm in length and ∼15 nm in width. Phase-pure AgHA was demonstrated in the X-ray diffraction patterns and Fourier transform infrared spectroscopy spectra. Comparing with hydroxyaptite (HA), 0.5AgHA exhibited a 3-log reduction in the number of bacteria. Diffusion of the entrapped Ag+ ions towards the crystal structure surface was revealed by an increase of 6 at. % Ag in the X-ray photoelectron spectroscopy results. Furthermore, less than 0.5 ppm of Ag+ ions being released from 0.5AgHA into the deionized water medium was evidenced from the inductively coupled plasma mass spectrometry results. AgHA produced by co-precipitation gave rise to minimal release of Ag+ ions. It was hypothesized that the diffused surface Ag+ ions damaged the bacteria cell membrane and impede its replication. With the culturing time, significant increase in the number of human mesenchymal stem cells (p < 0.05) was demonstrated on 0.5AgHA. © 2013 Wiley Periodicals, Inc. J Biomed Mater Res Part A: 101A: 2456–2464, 2013.