The development of reliable, eco-friendly processes for the synthesis of nanoscale materials is an important aspect of nanotechnology. In this paper, we report on the use of an alkalotolerant actinomycete (Rhodococcus sp.) in the intracellular synthesis of gold nanoparticles of the dimension 5-15 nm. Electron microscopy analysis of thin sections of the gold actinomycete cells indicated that gold particles with good monodispersity were formed on the cell wall as well as on the cytospasmic membrane. The particles are more concentrated on the cytoplasmic membrane than on the cell wall, possibly due to reduction of the metal ions by enzymes present in the cell wall and on the cytoplasmic membrane. The metal ions were not toxic to the cells and the cells continued to multiply after biosynthesis of the gold nanoparticles.