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In recent times, nanoparticles (NPs) have found increasing interest owing to their size, large surface areas, distinctive structures, and unique properties, making them suitable for various industrial and biomedical applications. Biogenic synthesis of NPs using microbes is a recent trend and a greener approach than physical and chemical methods of synthesis, which demand higher costs, greater energy consumption, and complex reaction conditions and ensue hazardous environmental impact. Several microorganisms are known to trap metals <i>in situ</i> and convert them into elemental NPs forms. They are found to accumulate inside and outside of the cell as well as in the periplasmic space. Despite the toxicity of NPs, the driving factor for the production of NPs inside microorganisms remains unelucidated. Several reports suggest that nanotization is a way of stress response and biodefense mechanism for the microbe, which involves metal excretion/accumulation across membranes, enzymatic action, efflux pump systems, binding at peptides, and precipitation. Moreover, genes also play an important role for microbial nanoparticle biosynthesis. The resistance of microbial cells to metal ions during inward and outward transportation leads to precipitation. Accordingly, it becomes pertinent to understand the interaction of the metal ions with proteins, DNA, organelles, membranes, and their subsequent cellular uptake. The elucidation of the mechanism also allows us to control the shape, size, and monodispersity of the NPs to develop large-scale production according to the required application. This article reviews different means in microbial synthesis of NPs focusing on understanding the cellular, biochemical, and molecular mechanisms of nanotization of metals.