Creating new adsorbents is crucial for removing contaminants from water due to increased industrialization, which has worsened water pollution in recent years. In this study, a magnetic biocomposite, Zirconium (Zr)-doped chitosan (CS)-coated iron oxide nanoparticles (Fe3O4-NPs)-peanut husk (PH)-based activated carbon (AC) (Zr-CS/Fe3O4-NPs@PH-AC), was synthesized for efficient removal of alizarin red (AR) and congo red (CR) dyes, alongside antibacterial applications. Characterization via scanning electron microscopy (SEM) and Brunauer-Emmett-Teller (BET) analysis revealed micropores and mesopores development due to chemical activation of PH biomaterial and Fe3O4-NPs addition. Fourier transform infrared spectroscopy (FTIR) and X-ray diffraction (XRD) identified functional groups and structural properties. Vibrating sample magnetometry (VSM) analyzed magnetic properties. Optimal conditions for AR/CR removal were determined, including Zr-CS/Fe3O4-NPs@PH-AC dose, dye dose, contact time, and temperature, achieving maximum removal percentages. Experimentally determined maximum adsorption capacities for AR and CR were 374.3 and 154.1 mg·g−1, respectively. Cytotoxicity studies affirmed the eco-friendly and non-toxic nature of the adsorbent by exhibiting the reduction in the cell viability from 100 % to 88.68 % from the 0 to 200 μg·L−1 respectively. Additionally, the biocomposite exhibited significant antibacterial activity against Escherichia coli (E. coli) and Staphylococcus aureus (S. aureus) due to magnetic NPs. The material in this study shows extreme compatibility for numerous applications.