The interaction between silver nanoparticles and biologically active iodinated 4-aryloxymethyl coumarins4-(4-iodo-phenoxymethyl)-benzo[h]coumarin (4IPMBC) and 4-(4-iodo-phenoxymethyl)-6-methoxy coumarin (4IPMMC) has been studied using absorption and fluorescence spectroscopy. The absorption spectral changes of dyes with the addition of silver nanoparticles suggest their possible interaction with silver nanoparticles. Fluorescence quenching has been observed for both dyes with the addition of silver nanoparticles. The Stern–Volmer plots of fluorescence quenching are found to be nonlinear showing positive deviation. The magnitudes of quenching rate parameter and fluorescence lifetime measurements indicate the presence of static quenching mechanism. The binding constants and the number of binding sites have been estimated from fluorescence data. The role of diffusion, energy transfer and electron transfer processes in fluorescence quenching mechanism has been discussed.