In this report, Lawsonia inermis leaves extract is employed for the first time to synthesize Magnesium Oxide (MgO) nanoparticles (NPs) in a green approach. The green synthesis of MgO NPs with Lawsonia inermis leaves extract has extra benefits like eco-friendly, cost-effective, rapid synthesis, safer, and give natural stabilization and capping action. MgO NPs were also prepared by the chemical method for the comparative study of properties. Sodium hydroxide was used as a reducing agent, and magnesium acetate as a precursor in the chemical method whereas in green synthesis leaves extract of Lawsonia inermis used. The prepared MgO NPs were characterized using different techniques for their average crystalline size, particle size, morphology, elemental analysis, microstructure and functional groups of the materials. The average crystalline size of 20 nm and 24 nm were observed for green and chemically synthesized MgO NPs. The antibacterial activity of green and chemically synthesized MgO NPs using different concentrations of (20–80 μL) against B. subtilis, S. aureus gram-positive and E. coli, P. vulgaris gram-negative bacteria were performed. A large inhibition zone is observed for green synthesized MgO NPs over chemical synthesized MgO NPs confirmed the higher activity for green synthesized MgO NPs. The bio-synthesized MgO NPs showed good antibacterial activity and exhibited maximum inhibition zone at 80 μL concentration. This study presents a rapid, low cost, environmentally friendly green approach for MgO NPs synthesis and obtained MgO NPs can also be used against other microbial species in the future.