Application of drug conjugated iron oxide hematite (α-Fe2O3) nanoparticles are of tremendous interest in biomedicine nowadays. Meanwhile, green production of iron oxide nanoparticles is gaining favour due to its sustainability, ease of usage, and biocompatibility. Therefore, this work reports on the use of hexahydrate ferric chloride and nerium oleander flower extract to synthesize nanoscaled hematite (α-Fe2O3) iron oxide particles conjugated with various drugs for antibacterial agents. Diverse morphological, physicochemical, structural, optical, and magnetic characteristics have been characterized using FESEM, EDX, XRD, UV–vis, FTIR, Raman and vibrating sample magnetometer. The synthesis of the polyshaped iron oxide nanoparticles, with average sizes ranging from 47.2 ± 20 nm, was accomplished. Furthermore, temperature-dependent variations in magnetic behavior were observed during calcination. The XRD and Raman spectra revealed hematite (α-Fe2O3) type formation of iron oxide nanoparticles. Only calcinated IO-NPs at high temperatures (700 °C) demonstrated low coercivity and residual magnetism, which revealed weak ferromagnetic ordering; other calcinated samples, including nascent ones, showed incredibly weak ferromagnetic ordering. Besides, the effectiveness of drug-encapsulated iron oxide nanoparticles against bacteria in vitro was examined. It was interesting to observe that gentamycin-coated IO-NPs tended to be more susceptible to S. aureus than E. coli bacteria, but streptomycin-conjugated IO-NPs showed the reverse trend. However, as compared to the nascent sample and the high temperature (700 °C) calcinated sample, both antibiotic-loaded IO-NPs displayed better inhibitory abilities.