The risks that dyes, drugs, and pathogenic bacterial strains bring to ecosystems and public health when they contaminate water bodies, emphasize the need for adaptable materials that can efficiently treat a wide range of contaminants. In the current investigation, α‐Fe2O3 nanoparticles were fabricated via green synthesis and utilized to degrade dextromethorphan and dyes. The α‐Fe2O3 nanoparticles were initially characterized through visual assessment of color and subsequently analyzed using UV spectroscopy, FTIR, SEM/EDS, and XRD. The TGA curve for α‐Fe₂O₃ nanoparticles shows a multi‐step weight loss pattern as temperature increases from room temperature to 700 °C. The first weight loss occurs between 50 °C and 200 °C, followed by 9% between 200 °C and 350 °C, 3% between 350 °C and 500 °C, and 5% between 500 °C and 700 °C. The photocatalytic degradation efficiency of synthesized α‐Fe2O3 nanoparticles was investigated for the degradation of dextromethorphan and two dyes, phenol red, and eosin yellow. The α‐Fe2O3 nanoparticles exhibited exceptional photocatalytic performance, achieving approximately 99% degradation of dextromethorphan and 98% and 90% degradation of phenol red, and eosin yellow respectively within 120 min. In addition, α‐Fe2O3 nanoparticles exhibited promising antibacterial activity against both gram‐negative and gram‐positive pathogenic bacteria which describes their application against resistant organisms.