The increasing production and use of engineered nanoparticles, coupled with their demonstrated toxicity to different organisms, demands the development of a systematic understanding of how nanoparticle toxicity depends on important environmental parameters as well as surface properties of both cells and nanomaterials. We demonstrate that production of the extracellular polymeric substance (EPS), colanic acid by engineered Escherichia coli protects the bacteria against silver nanoparticle toxicity. Moreover, exogenous addition of EPS to a control strain results in an increase in cell viability, as does the addition of commercial EPS polymer analogue xanthan. Furthermore, we have found that an EPS producing strain of Sinorhizobium meliloti shows higher survival upon exposure to silver nanoparticles than the parent strain. Transmission electron microscopy (TEM) observations showed that EPS traps the nanoparticles outside the cells and reduces the exposed surface area of cells to incoming nanoparticles by inducing cell aggregation. Nanoparticle size characterization in the presence of EPS and xanthan indicated a marked tendency towards aggregation. Both are likely effective mechanisms for reducing nanoparticle toxicity in the natural environment.