Hybrid plasmonic nanostructures consisting of Ag nanoparticles decorated TiO2 nanorods with highly enhanced photocatalytic activity were synthesized by a facile wet chemical method. The structural, optical, plasmonic and photocatalytic properties of the synthesized Ag-TiO2 hybrid nanostructures were well characterized by X-ray diffraction (XRD), transmission electron microscopy (TEM) with energy dispersive X-ray spectroscopy (EDX), atomic force microscopy (AFM), Raman spectroscopy, photoluminescence spectroscopy (PL) and UV-visible absorption spectroscopy. The photocatalytic activities of the as-synthesized Ag-TiO2 hybrid nanostructures were evaluated by studying sun light-driven photocatalytic degradation of methylene blue (MB) and methyl orange (MO) dyes in water. The results showed that Ag-TiO2 hybrid nanostructures exhibit highly enhanced photocatalytic activity towards degradation of MB and MO dyes and the photocatalytic efficiency increased with increase in Ag nanoparticle loading. The mechanism underlying the highly enhanced photocatalytic activity of Ag-TiO2 nanohybrids is proposed. We attribute the observed enhanced photocatalytic activity of Ag-TiO2 hybrid nanostructures to the efficient separation of photogenerated charge carriers in TiO2 due to the electron scavenging action of Ag nanoparticles and the improved sun light utilization by the plasmonic nanohybrids originating from the surface plasmon resonance (SPR) absorption of Ag nanoparticles.