This research focuses on the effect of different capping agents on Ag nanoparticles (NPs), for the improved efficiency of organic photovoltaic cells. Ag NPs were produced by solution chemistry of the polyol process, and then successfully capped with oleylamine (OA), polyvinylpyrrolidone (PVP), or thiol terminated polystyrene (PS-SH), as proven by FT-IR spectra. These Ag NPs with different capping agents were finally embedded in the photoactive layer of poly(3-hexylthiophene): 6,6-phenyl-C61 butyric acid methyl ester (P3HT:PCBM) bulk heterojunction solar cells. Because of the presence of a suitable capping agent that prevents aggregation, the dispersity of the Ag NPs in organic solvent was significantly improved, in the sequence of OA, PVP, and PS-SH. The photovoltaic cells exhibit increased performance from 3.11% to 3.49%, at an optimized blend ratio of Ag NPs (2.5 wt%) capped with PS-SH. This enhancement is mainly attributed to the improved short circuit current (increased from 8.49 mA/cm(2) to 9.29 mA/cm(2)) and extinction with effective light scattering, caused by improved dispersion of the Ag NPs in BHJ films, through reducing unwanted particle aggregation.