Metal nanoparticles combined with environmentally sensitive polymers can lead to enhanced nanometer-sized switches. We present a silver nanoparticle synthesis method that uses poly(N-isopropylacrylamide) (PNIPAM) as the nucleating, capping, and stabilizing agent. The synthesis is performed at room temperature by sodium borohydride-mediated reduction of silver nitrate in the presence of a fully hydrated polymer. The resulting metal nanoparticles have a narrow size distribution comparable to or better than those achieved with other synthesis methods. The silver particles can be thermally precipitated by the collapse of the PNIPAM shell and resolubilized with fast response times, as shown by surface plasmon spectroscopy. The silver-PNIPAM composite allows for combined surface plasmon and thermal switching applications.