Hypersaline environment is a habitat with extreme osmotic conditions along with low Aw, serving as a home to extremely halophilic and halotolerant bacteria. The hypersaline environments, such as solar salterns located along the rivers, are exposed to fluxes of iron from iron ore transportation and other industrial wastes. The solar salterns often serve as a sink for metal intoxicants. Studies on archaea interaction with metal ions indicate the formation of minerals such as goethite, hematite, rhodochrosite, etc. However, studies exploring haloarchaeal candidates interacting with metals such as Fe3+ in a hypersaline growth condition are scarce. This study unveils for the first time formation of γFe2O3 from Fe3+ by the haloarchaeon, Haloferax sp. GUSF-1 thus implying the significance of the culture synthesizing minerals in hypersaline sediments. γFe2O3 is formed from Fe3+ by the haloarchaeon Haloferax sp. GUSF-1 (GenBank accession no.GU-1KF796625), under microaerophilic growth on sodium acetate. A 50 mg L−1 of Fe2+ and 30.6 mg L−1 of Fe3+ was detected inside the cells. Simultaneously, a brown-colored crystalline material deposited in the culture broth through an iron reductase inhibited by Zn2+ ions. The XRD of the deposit exhibited d values of 2.96, 2.514, 2.086, 1.6, and 1.45, while SEM-EDX displayed cubic and irregularly shaped minute particles with peaks for Fe at 0.6, 6.4, and 6.6 keV, respectively. TEM profiles revealed polycrystalline particles of 12–23 nm in size. Further, the SAED concentric pattern of light scattering with well-defined diffraction spots was consistent and matched with maghemite's crystal structure (γFe2O3). The FTIR spectrum revealed a peak at 1450 cm−1 indicating iron oxyhydroxide formation as an intermediate having γ-FeOOH stretching bond vibrations. Conclusively, this study opens the possibility of the haloarchaea isolated from solar salterns for its exploitation in nanobiotechnology.