The present work focuses on the chemical reactivity of Ag oxalate powders under mechanical processing conditions. The powders were submitted to mechanical loads in the presence of an aqueous solution containing a polymeric surfactant. A gradual decrease of the total mass of powders was observed, ascribable to the occurrence of a decomposition process. X-ray diffraction and UV vis spectrophotometric analyses indicated that the Ag oxalate decomposes into metallic Ag and gaseous carbon dioxide. Transmission electron microscopy showed that metallic Ag exists in the form of particles with average size of about 5 nm. The formation of nanometer-sized Ag particles can be related to the plastic deformation and attrition processes taking place at the points of contacts between neighboring particles during the mechanical loading at collision.