The removal of mixture of two azo dyes, Acid blue 29 and Ponceau xylidine, was studied by heterogeneous Fenton and Fenton-type processes using hydrogen peroxide and sodium persulphate as oxidants in the presence of and nano and micro-Fe2O3 particles as catalysts. The synthesised nano-Fe2O3 particles were characterised using analytical techniques viz. FT-IR, TEM, EDX, powder XRD and VSM. We have examined the effects of particle size on the COD removal efficiency and the reusability of the catalyst after optimising pH, and concentrations of catalyst and oxidant. Combination of nano-Fe2O3 and hydrogen peroxide possessed higher COD removal efficiency, which was accelerated in acidic pH and inhibited at pH > 6. Total consumption of hydrogen peroxide confirmed the efficiency of the optimised parameters. The mechanism of the formation of intermediate ions and products are proposed. COD removal and consumption of hydrogen peroxide follow pseudo-first-order kinetics. The toxicity of the solutions was assessed using Aliivibrio fischeri light loss and Escherichia coli growth inhibition assays. Both the assays showed different toxicity levels for the same solution.