The study investigates the fabrication of an innovative nanocomposite composed of carboxymethyl chitosan (CMC) combined with different amounts of iron (III) oxide (Fe₂O₃) to boost dye degradation and antibacterial effectiveness. A top-down ball milling technique formed the nanocomposites and was extensively investigated for their structural, morphological, and functional features. The mean particle size of the 0.3Fe₂O₃/CMC and 0.6Fe₂O₃/CMC nanocomposites was measured at 83.74 nm and 124.5 nm, respectively, with polydispersity index (PdI) values suggesting satisfactory homogeneity. The adsorption effectiveness of Reactive Blue 19 (RB 19) dye was evaluated under different circumstances, with the 0.6Fe₂O₃/CMC nanocomposite exhibiting the maximum adsorption capacity of 140 mg/g at an ideal pH of 5. Kinetic analyses indicated that the adsorption process adhered to a pseudo-second-order kinetic model. The nanocomposites had significant bactericidal performance, with the 0.6Fe₂O₃/CMC nanocomposite exhibiting the most extensive inhibition zones, particularly against E. coli (28.4 mm) and Pseudomonas aeruginosa (23.2 mm). Furthermore, the reusability of the 0.6Fe₂O₃/CMC nanocomposite was validated by five adsorption-desorption cycles, retaining over 90 % efficiency. The results underscore the efficacy of Fe₂O₃/CMC nanocomposites as viable materials for wastewater treatment and antibacterial purposes, offering a promising approach for environmental remediation.