Pristine silver nanoparticles (AgNPs) are not chemically stable in the environment and react strongly with inorganic ligands such as sulfide and chloride once the silver is oxidized. Understanding the environmental transformations of AgNPs in the presence of specific inorganic ligands is crucial to determining their fate and toxicity in the environment. Chloride (Cl-) is a ubiquitous ligand with a strong affinity for oxidized silver and is often present in natural waters and in bacterial growth media. Though chloride can strongly affect toxicity results for AgNPs, their interaction is rarely considered and is challenging to study because of the numerous soluble and solid Ag-Cl species that can form depending on the Cl/Ag ratio. Consequently, little is known about the stability and dissolution kinetics of AgNPs in the presence of chloride ions. Our study focuses on the dissolution behavior of AgNPs in chloride-containing systems and also investigates the effect of chloride on the growth inhibition of E.coli (ATCC strain 33876) caused by Ag toxicity. Our results suggest that the kinetics of dissolution are strongly dependent on the Cl/Ag ratio and can be interpreted using the thermodynamically expected speciation of Ag in the presence of chloride. We also show that the toxicity of AgNPs to E.coli at various Cl- concentrations is governed by the amount of dissolved AgClx(x-1)- species suggesting an ion effect rather than a nanoparticle effect.