In the present study, we utilized
Stevia rebaudiana
L. (SRLe) extract to in situ biosynthesize nanoscale alpha hematite (α-Fe
2
O
3
) nanoparticles (NPs) with potent antioxidant, antimicrobial, and anticancer properties. SRLe-α-Fe
2
O
3
was characterized using physiochemical analyses, including UV/Vis, FTIR, XRD, DLS, EDX, SEM, and TEM studies. Among tested solvents, CHCl
3
/MeOH (2:1
v
/
v
) SRL extract (least polar solvent) contained the highest EY, TPC, and antioxidant capacity of ~3.5%, ~75 mg GAE/g extract, and IC
50
= 9.87 ± 0.7 mg/mL, respectively. FTIR confirmed the engagement of coating operation to the colloidal α-Fe
2
O
3
NPs. TEM, SEM, and DLS revealed that SRLe-α-Fe
2
O
3
has a spherical shape, uniform size distribution with aggregation for an average size of ~18.34 nm, and ζ = −19.4 mV, forming a repulsive barrier that helped to improve stability. The synthesized nanoparticles displayed considerable antibacterial activity against
E. coli
and
S. aureus
bacterial growth, and exhibited superior activity against the A549 lung cancer cell lines. These findings indicate that the increased availability of bioactive substances with antioxidant properties of SRLe makes it a potentially interesting material for the preparation of biologically active compounds and green synthesis of nanoparticles.