Interaction of bacteria with citrate-reduced silver nanoparticles (AgNPs) of size 25 nm ± 8.5 nm is studied using Raman spectroscopy in conjunction with plasmon resonance imaging of single bacterial cells. Distribution of isolated nanoparticles (NPs) inside Escherichia coli (ATCC 25922; E. coli) is observed by hyperspectral imaging (HSI) as a function of incubation time. Time-dependent degradation of bacterial DNA upon incubation of AgNPs with E. coli is proven by Raman spectroscopic studies. While attachment of NPs is evident in HSI, molecular changes are evident from the surface-enhanced Raman spectra of adsorbed DNA and its fragments. Distinct enhancement of DNA features is observed upon interaction of AgNPs and the number of such distinct features increases with incubation time, reaches a maximum, and decreases afterwards. This systematic interaction of DNA with the NPs system and its gradual chemical evolution is proven by investigating isolated plasmid DNA. A comparative Raman study with silver ions has shown that DNA features are observable only when bacteria are incubated with AgNPs. Energetics of interaction examined with microcalorimetry suggests the exothermicity of −1.547 × 1010 cal mol−1 for the NP–bacteria system. Specific interaction of AgNPs with exocyclic nitrogen present in the bases, adenine, guanine, and cytosine, leads to the changes in DNA.