Superparamagnetic iron oxide nanoparticles (SPIONs) have the potential to be used as multimodal imaging and cancer therapy agents due to their excellent magnetism and ability to generate reactive oxygen species when exposed to light. We report the synthesis of highly biocompatible SPIONs through a facile green approach using fruit peel extracts as the biogenic reductant. This green synthesis protocol involves the stabilization of SPIONs through coordination of different phytochemicals. The SPIONs were functionalized with polyethylene glycol (PEG)-6000 and succinic acid and were extensively characterized by X-ray diffraction analysis, field emission scanning electron microscopy, energy-dispersive X-ray spectroscopy, atomic force microscopy, Rutherford backscattering spectrometry, diffused reflectance spectroscopy, fluorescence emission, Fourier-transform infrared spectroscopy, ultraviolet-visible spectroscopy, and magnetization analysis. The developed SPIONs were found to be stable, almost spherical with a size range of 17–25 nm. They exhibited excellent water dispersibility, colloidal stability, and relatively high
R
2
relaxivity (225 mM
−1
s
−1
). Cell viability assay data revealed that PEGylation or carboxylation appears to significantly shield the surface of the particles but does not lead to improved cytocompatibility. A highly significant increase of reactive oxygen species in light-exposed samples was found to play an important role in the photokilling of human cervical epithelial malignant carcinoma (HeLa) cells. The bio-SPIONs developed are highly favorable for various biomedical applications without risking interference from potentially toxic reagents.