This research work includes the fabrication of iron oxide nanoparticles (Fe2O3 NPs) by green construction approach using Wisteria sinensis leaves extract. Due to its eco-friendly approach, the synthesis of iron oxide NPs (Fe2O3 NPs) using various plant sources, such as plant parts, and microbial cells have gained a lot of attention in recent years. Cost-effectiveness and ease of availability make Wisteria sinensis leaves extract a potential candidate for the construction of iron oxide NPs. The various key features like biocompatibility, non-toxicity capping, and stabilizing agents present in biological sources are advantageous for usage in a variety of applications. The phytoconstituents present in the leaf extract of Wisteria sinensis serve as reducing and stabilizing agents. The biologically fabricated (Fe2O3 NPs) were analyzed using FT-IR, XRD, UV–vis spectroscopy, and SEM. In the present work, the antioxidant and photocatalytic dye degradation efficiency of Fe2O3 NPs has been studied. The dye degradation efficiency of methylene blue dye was found to be 87% at 180 min upon exposure to sunlight. The capacity of Fe2O3 NPs to scavenge 2,2-diphenyl-1-picrylhydrazyl hydrate free radicals (DPPH)was examined using a UV–Vis spectrophotometer. The study compared the radical scavenging activity (RSA) of Fe2O3 nanoparticles (NPs) with that of the standard antioxidant ascorbic acid. The results demonstrated that Fe2O3 NPs have a greater ability to scavenge radicals than ascorbic acid. The half-maximal inhibitory concentration (IC50) of Fe2O3 NPs was observed to range from 0.12 to 0.17. Furthermore, Fe2O3 NPs displayed the highest antifungal activity, with an inhibition zone of 26.8 mm against F. oxysporum. These findings suggest that the biologically synthesized Fe2O3 NPs possess potent antimicrobial and dye degradation properties.