Silver nanoparticles (AgNPs) are frequently used as antimicrobials. While the mechanism(s) by which AgNPs are toxic are unclear, their increasing use raises the concern that release into the environment could lead to environmental toxicity. We characterized the physicochemical behavior, uptake, toxicity (growth inhibition), and mechanism of toxicity of three AgNPs with different sizes and polyvinylpyrrolidone (PVP) or citrate coatings to the nematode Caenorhabditis elegans. We used wild-type (N2) C. elegans and strains expected to be sensitive to oxidative stress (nth-1, sod-2 and mev-1), genotoxins (xpa-1 and nth-1), and metals (mtl-2). Using traditional and novel analytical methods, we observed significant aggregation and extra-organismal dissolution of silver, organismal uptake and, in one case, transgenerational transfer of AgNPs. We also observed growth inhibition by all tested AgNPs at concentrations in the low mg/L levels. A metallothionein-deficient (mtl-2) strain was the only mutant tested that exhibited consistently greater AgNP sensitivity than wild-type. Although all tested AgNPs were internalized (passed cell membranes) in C. elegans, at least part of the toxicity observed was mediated by ionic silver. Finally, we describe a modified growth assay that permits differentiation between direct growth-inhibitory effects and indirect inhibition mediated by toxicity to the food source.