Photolysis of silver chloride in aqueous medium resulted in the formation of silver clusters and the evolution of oxygen from water. These silver clusters, when photooxidized in the presence of aqueous potassium iodide solution resulted in hydrogen being evolved from water. Preliminary laser investigations were carried out to confirm the proposed mechanism. The photooxidation process may possibly be applied to recycle silver from exposed photographic film wastes and as a means of converting solar energy, with simultaneous evolution of hydrogen.