This study evaluates the effectiveness of microalgal-based carbon-encapsulated iron nanoparticles (ME-nFe) in the removal of pharmaceutical compounds (PhACs) from water solutions and real municipal effluent at a laboratory scale. The investigated PhACs were chosen to represent different classes of synthetic drugs: antibiotics, anti-inflammatory drugs, antihypertensives, antiepileptics, neuroprotectors, and antidepressants. The adsorbent material was produced through hydrothermal carbonization (225 °C for three hours), using microalgae grown on wastewater as the carbon source. ME-nFe showed heterogeneity in terms of porosity (with both abundance of macro and mesopores), a total pore volume of 0.65 mL·g-1, a specific surface area of 117 m2·g-1 and a total iron content of 40%. Laboratory scale adsorption tests (1 g·L-1 of nanoparticles with 2 minutes contact time) showed high removal for the most hydrophobic compounds. Removal efficiencies were high (over 98%) for Irbesartan, Ofloxacin and Diclofenac, promising (over 65-80%) for Clarithromycin, Fluoxetine, Lamotrigine and Metoprolol, but low for Gabapentin-Lactam and Propyphenazone (<20%). Electrostatic interactions between the drugs and the surface of the nanoparticles may account for the observed data, although additional removal mechanisms cannot be ruled out.