Magnetic nanoparticles (MNPs), particularly iron oxide nanoparticles (IONPs), are a fascinating group of nanoparticles that have been considerably investigated for biomedical applications because of their superparamagnetic properties, biodegradable nature, and biocompatibility. A novel Gram‐positive moderately thermophilic bacterial strain, namely Bacillus tequilensis ASFS.1, was isolated and identified. This strain is capable of producing superparamagnetic Fe3O4 nanoparticles and exhibiting magnetotaxis behavior. This strain swimming behavior was investigated under static and dynamic environments, where it behaved very much similar to the magnetotaxis in magnetotactic bacteria. This study is the first report of a bacterium from the Bacillaceae family that has the potential to intracellular biosynthesis of IONPs. MNPs were separated by a magnetic and reproducible method which was designed for the first time for this study. In addition, UV‐visible spectrophotometer, Fourier‐transform infrared spectroscopy, vibrating sample magnetometer, field emission scanning electron microscopy (FESEM), X‐ray diffraction, and thermal gravimetric analysis were utilized to characterize the bio‐fabricated magnetite nanoparticles. Analysis of the particle size distribution pattern of the biogenic MNPs by FESEM imaging revealed the size range of 10–100 nm with the size range of 10–40 nm MNPs being the most frequent particles. VSM analysis demonstrated that biogenic MNPs displayed superparamagnetic properties with a high saturation magnetization value of 184 emu/g. After 24 h treatment of 3T3, U87, A549, MCF‐7, and HT‐29 cell lines with the biogenic MNPs, IC50 values were measured to be 339, 641, 582, 149, and 184 μg mL−1, respectively. This study presents the novel strain ASFS.1 capable of magnetotaxis by the aid of its magnetite nanoparticles and paving information on isolation, characterization, and in vitro cytotoxicity of its MNPs. The MNPs showed promising potential for biomedical applications, obviously subject to additional studies.