A simple method is described for the synthesis of graphene-silver nanoparticle hybrids from graphite and silver precursors using microwave spark ignition process. Adding ecofriendly free radical initiators, in the presence of hydrogen peroxide solution leads to the expansion of graphite to graphene nanosheets. Simultaneously, silver ions intercalated between the graphene layers are reduced to silver nanocrystals leading to the development of graphene-silver nanoparticle hybrids. Transmission electron microscopic (TEM) studies reveal the successful formation of graphene-silver nanoparticle hybrids. X-ray diffraction (XRD) shows that the silver nanoparticles formed on the graphene surfaces are face centered cubic crystals. The surface composition and functional groups present on the graphene-silver nanoparticle hybrids are corroborated using X-ray photoelectron spectroscopy (XPS) and Fourier Transform Infrared Spectroscopy (FT-IR). The lithium storage capacity of the synthesized material, when used as an anode material for rechargeable lithium secondary batteries is investigated. Its first specific discharge capacity is observed to be 580mAhg−1 and this has been increased to 827mAhg−1, by incorporating the silver nanoparticles between the graphene platelets. The reversible capacity of the graphene-silver nanoparticle hybrids is observed to be 714mAhg−1, which is significantly higher compared to that of graphene (420mAhg−1) prepared by the same process.