The objective of the current work was to synthesize and characterize ferromagnetic activated carbon from peanut shells (PSs) and apply it for the degradation of methyl orange (MO) following the heterogeneous Fenton process. PSs were activated with phosphoric acid and potassium hydroxide at 1:1, 1:2, and 1:3 solid/liquid activation ratios and different concentrations (0.5, 1, and 1.5 M) and pyrolized at 500°C. Based on the iodine indexes, KOH-activated carbon adsorbents exhibited higher porosity than the H3PO4-activated adsorbents. KOH-activated carbon at a 1:3 activation ratio (iodine value 591 mg/g) was selected for magnetization using iron (II) ions and catalytic mineralization of MO dye. The ferromagnetic activated carbon (AC-PS@FeII) was characterized using Fourier-transform infrared (FTIR) spectroscopy, X-ray diffraction (XRD), scanning electron microscopy (SEM), energy-dispersive X-ray (EDX) analysis, and nitrogen-adsorption BET measurements. AC-PS@FeII contained ferromagnetite with a cubic spinel structure and a specific area of 181.96 m2·g–1. AC-PS@FeII degraded MO with a degradation efficiency of 99.22% at pH 2, 4 g/L of catalyst dosage, and a 50-min contact time. The results of recyclability tests, using distilled water, revealed a slight decrease in degradation capacity after four runs, indicating that the developed catalyst was appreciably stable. The hetero-Fenton catalyst from peanut shells could be an ideal catalyst for treating wastewater contaminated with dyes as a path toward a circular economy.