A zwitterionic sulfobetaine-based diblock copolymer was successfully synthesized and used in the preparation and stabilization of Ag nanoparticles (AgNPs). For the related block copolymer, a precursor AB type diblock copolymer was synthesized via atom transfer radical polymerization by using a MPEG-based ATRP macroinitiator and 2-(N-dimethylamino)ethyl methacrylate (DMA) comonomer. Tertiary amine residues of PDMA blocks in poly(ethylene glycol) methyl ether-b-poly[2(N-diethylamino)ethyl methacrylate] (MPEG-b-PDMA) precursor was then converted to polybetaine structures by reacting with 1,3-propanesultone to obtain poly(ethylene glycol) methyl ether-b-poly[3-dimethyl(methacryloyloxyethyl) ammonium propane sulfonate] (MPEG-b-P beta DMA) derivative. The resulting block copolymer was successfully used as stabilizer in the chemical and sonochemical synthesis of spherical AgNPs with a diameter in the range of 7.9-9.3 nm. The average diameter of AgNPs synthesized by sonochemical method was smaller than those synthesized by chemical method. The MPEG-b-P beta DMA diblock copolymer was determined to be a good stabilizer for AgNPs. The AgNPs dispersion was stable for more than 5 months without any flocculation at room temperature. The catalytic activity of polymer-AgNP dispersion was also investigated in the reduction of p-nitrophenol to p-aminophenol and was found to be quite effective.