Green synthesis, favoured for its eco-friendliness, simplicity, and cost effectiveness, was employed to synthesise iron nanoparticles (Fe-NPs), using Moringa oleifera leaf extract (MOL) as a capping and reducing agent. The biosynthesised Fe-NPs were characterised through UV–Vis spectroscopy, XRD, FTIR, EDAX, and TEM, confirming their presence and stability. In the UV–Vis spectra, there was a peak at 414 nm indicating successful reduction of Fe3+ ions, while XRD analysis indicated crystalline structures where Debye–Scherrer equations gave a particle size of approximately 22 nm. Biofunctional groups responsible for reduction and stabilisation of Fe-NPs were identified by FTIR analysis, while elemental composition was confirmed using EDAX, as spherical Fe-NPs from TEM analysis had an average size of 20 nm. Photocatalytic studies have shown how efficient malachite green (MG) dyes are broken up by these materials, with maximum degradation (97.21%) occurring at pH 3.5. At dye concentrations higher than this level, degradation efficiency decreases due to light absorption and competition for reactive sites. The biosynthesised Fe-NPs exhibited strong antioxidant properties with EC50 values for DPPH and ABTS radical scavenging activities of 21.36 ± 1.01 µg/mL and 24.52 ± 1.20 µg/mL, respectively. Additionally, the mechanical properties of the chitosan film reinforced with Fe-NPs were assessed, with the E-type combination (73 ml of chitosan and 2 ml of Fe-NPs) revealing the highest tensile strength of 81 MPa and an elastic modulus of 2389 MPa. These discoveries point out that MOL-derived Fe-NPs can be used in environmental applications such as wastewater treatment processes.