We examine a novel one-step process to fabricate metal nanoparticle (NP)-polymer nanofiber (NF) composites via polymer solution electrospinning. The novelty of the process lies in the use of the electrospinning polymer as both the reducing agent for the metal salt precursor and stabilizer for the resulting metal NPs. To date, previous studies involve the addition of the metal salt precursor to the polymer solution, where the solution is subsequently electrospinned and the resulting NF composite is subjected to an additional step of either thermal, chemical or radiolytic (UV and microwave irradiation) reduction process to transform the incorporated metal salt in the fiber nanocomposite. Others incorporated separately prepared metal NPs into the polymer solution after which the polymer fiber nanocomposites are fabricated by electrospinning the resulting solution. Usually the synthesis of the metal NPs entail the use of organic solvents (eg. toluene) and corrosive reducing agents (sodium borohydride). In this study, to the best of our knowledge, an organic solvent- and corrosive reducing agent-free model system involving poly(ethylene oxide) (PEO)-AgNO₃-water system to generate Ag NP-PEO polymer fiber nanocomposites via electrospinning all in one-step at ambient conditions is presented for the first time. The system has the potential as building blocks for fabricating functional fabrics with antimicrobial and catalytic properties for biomedical, filtration, sensor and catalytic applications. The process is clean, green and energy efficient, since it is water based and performed at ambient conditions, and therefore is sustainable. The effects of metal NP incorporation, electrospinning and polymer solution parameters, and nanoparticle and nanofiber morphologies are studied using imaging, materials characterization and rheological techniques. For aqueous solutions of PEO at molecular weights (MWs) that are electrospinnable, we show that Ag⁺ ions in the PEO aqueous solution transform to Ag NPs at ambient conditions (presumably through the formation of pseudocrown ethers and their complexation with the Ag⁺ ions), without the use of any additional reducing agent and stabilizer. Such transformation is not possible at PEO MWs 20 kDa or lower. Ultra Violet (UV)/Visible (Vis) absorption spectrophotometry shows that the chemical reduction of Ag⁺ ions is almost complete within 4 hours and MW dependent. The resulting Ag NPs are spherical with sizes between 5-10 nm, crystalline and are well-dispersed at or near the surface of NF with fiber diameters between 150-300 nm as observed from transmission electron microscopy (TEM) analyses. The incorporation of Ag NPs to the polymer solution significantly improved fiber quality by decreasing fiber diameter and dramatically minimizing bead formation from bead-forming PEO solution as seen from scanning electron microscopy (SEM). These effects we believe to be due in large part to increased solution electrical conductivity and viscosity. We report interesting phenomena such as NP alignment (to form nanochains) and protrusion on the NF surface which was found to be primarily associated with the applied electrical field. A possible mechanism for NP alignment during electrospinning is proposed. X-ray photoelectron spectroscopy (XPS) and x-ray diffraction (XRD) analyses corroborate the presence of Ag on the NF matrix.