Silver nanoparticles (AgNPs) are increasingly used in a wide range of products and as a consequence, the environmental concentration will inevitably increase in the near future. Many aquatic organisms have been shown to be sensitive to the toxic effects of silver, including oxidative stress mechanisms. In this study, we assessed the ability of silymarin (Silybum marianum) to counter the oxidative effects of AgNPs in Nile tilapia (Oreochromis niloticus). Fish were fed on the diets supplemented with 50 or 200 mg kg−1 of free or nanoencapsulated silymarin for 50 days. Subsequently, they were exposed via the water to three concentrations (0.05, 0.1, and 0.5 mg L−1) of AgNPs for 24 h, and the effects of this exposure assessed on blood plasma and liver oxidative status. Growth performance and most body indices measured were not affected by any of the experimental diets. There were no effects of free silymarin (FS) or nanoencapsulated silymarin (NS) on levels of plasma aspartate aminotransferase (AST), alanine transaminase (ALT), or on the total protein (TP). In contrast, malondialdehyde (MDA) content, glutathione peroxidase (GPx) activity, and plasma glucose (GLU) were all affected by the high dietary FS and NS treatments compared with controls. Prior to the AgNPs exposure, the levels of SOD and GPx activity were higher and MDA levels lower in the silymarin treatment groups compared to controls. Exposure to AgNPs resulted in a reduction in the levels of GPx and SOD activity and an increase in the level of MDA that was dependent on the exposure concentrations of AgNPs. Based on GPx, MDA, and GLU indices, both forms of silymarin decreased the toxicity of AgNPs, but NS supplementation was the most effective. Thus, we show dietary silymarin supplementation can reduce AgNP toxicity and nanoencapsulation increases its efficacy as an antioxidant.