This study focuses on polyester fabric modification to produce environmentally-friendly multifunctional fabrics for varied applications. The nanoparticles of iron oxide were achieved from ferrous sulfate solution under alkaline conditions and applied to Tragacanth gum to form an efficient layer on the polyester surface. The synthesis of Fe3O4 nanoparticles with a crystal size of 12 nm was approved in the XRD spectra and iron oxide/Tragacanth gum nanocomposites with an agglomerated size of about 62 nm were confirmed by the SEM and EDX techniques. The formation of hydroxyl and iron oxide bands was observed in the FTIR and XPS patterns. The superparamagnetic behavior of treated samples exhibited by VSM with a magnetic saturation of 0.86 emu/g. The products showed an antibacterial activity (95 and 91%) toward Gram-positive and -negative bacteria. The absorbance intensity of methylene blue decreased from 2.6 to 1.6 by the treated sample. The synthesized nanoparticles on the treated surface indicated a lower release of iron ions and cell toxicity. The rate of cell duplication increased under a magnetic field with 60 Hz and 0.5 mT for 20 min/day. The product color changed from white to a brownish hue and the wetting capacity and thermal ability increased.