Silver doped multi-walled carbon nanotube/β-cyclodextrin (1% Ag-MWCNTs/β-CD) nanocomposite was prepared by reductive pre-treatment of Ag+ on MWCNTs, followed by binding with β-CD. Crystalline structure, morphology and crystallite size estimation were carried out by X-ray diffraction (XRD), Fourier transform infrared spectroscopy, field emission scanning electron microscopy (FE-SEM) and transmission electron microscopy (TEM). The interaction between Escherichia coli (E. coli), ATCC 25922 bacteria and 1% Ag doped MWCNTs/β-CD nanocomposite was investigated by FE-SEM. The antibacterial activity of the nanocomposite was studied by monitoring the absorbance of contaminated water using a UV-vis spectrophotometer. The nanocomposites caused a growth delay in the growth rate of E. coli bacteria. The structural analysis of the bacteria by FE-SEM showed clusters of nanocomposite anchored to the bacterial cell wall during the initial stages of interaction. Results also indicate that treated bacteria show significant damage on the outer membranes, which were recognised by the formation of ‘pits’. The study shows that 1% Ag-MWCNTs/β-CD nanocomposite is bactericidal.