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Nanotechnology provides innovative tools for medicine, agriculture, and environmental applications. Iron oxide nanoparticles (Fe2O3 NPs) are of particular biomedical interest due to their biocompatibility, magnetic properties, and therapeutic potential. Harnessing the phytoconstituents of F. indica for nanoparticle fabrication offers a sustainable approach to generate biofunctional nanomaterials with enhanced therapeutic efficacyIn this study, Fe2O3 NPs were biosynthesized using F. indica extract through a green and cost-effective method. The nanoparticles were characterized using Fourier Transform Infrared Spectroscopy (FTIR), Ultraviolet–Visible Spectroscopy (UV–Vis), Scanning Electron Microscopy (SEM), Dynamic Light Scattering (DLS), and Energy Dispersive X-ray Spectroscopy (EDX), confirming their rectangular (average size of 65 nm) morphology, functional group interactions, and elemental composition of iron and oxygen. The bio-fabricated Fe2O3 NPs displayed broad pharmacological activities: strong antileishmanial (71%), anti-inflammatory (79%), antioxidant (total antioxidant capacity 78.4%, total reducing power 75.2%, 2,2-diphenyl-1-picrylhydrazyl 64.6%), and antidiabetic effects (α-amylase inhibition 55.2%, α-glucosidase inhibition 56.6%), along with protein kinase inhibition (14.4 ± 1.22), indicating anticancer potential. Biocompatibility was confirmed by low hemolysis (1.46 ± 0.10). The nanoparticles also showed significant antimicrobial activity, including inhibition zones of 24.0 mm against Escherichia coli and 70 ± 2.1% antifungal activity against Ascochyta rabiei. The integration of F. indica phytochemicals into Fe2O3 NP synthesis not only offers an eco-friendly production method but also yields multifunctional nanoparticles. These findings highlight their promise as candidates for future biomedical applications, particularly in infectious disease management, oxidative stress-related disorders, and metabolic regulation.