The influence of powdered and colloidal nano-silica (NS) on the mechanical properties of cement mortar has been investigated. Powdered-NS (~40 nm) was synthesized by employing the sol–gel method and compared with commercially available colloidal NS (~20 nm). SEM and XRD studies revealed that the powdered-NS is non-agglomerated and amorphous, while colloidal-NS is agglomerated in nature. Further, these nanoparticles were incorporated into cement mortar for evaluating compressive strength, gel/space ratio, portlandite quantification, C–S–H quantification and chloride diffusion. Approximately, 27 and 37 % enhancement in compressive strength was observed using colloidal and powdered-NS, respectively, whereas the same was up to 19 % only when silica fume was used. Gel/space ratio was also determined on the basis of degree of hydration of cement mortar and it increases linearly with the compressive strength. Furthermore, DTG results revealed that lime consumption capacity of powdered-NS is significantly higher than colloidal-NS, which results in the formation of additional calcium-silicate-hydrate (C–S–H). Chloride penetration studies revealed that the powdered-NS significantly reduces the ingress of chloride ion as the microstructure is considerably improved by incorporating into cement mortar.