The article describes synthesis of green‐mediated hematite nanoparticles (20–30 nm) using Polianthes tuberosa flower extract. Structural, microscopic, and magnetic studies confirm the synthesis of iron oxide nanoparticles of pure hematite phase. Spectroscopic techniques are employed to identify different electronic transitions and defect levels as well as to estimate the energy bandgap and Urbach energy. A correlation among the particle size, bandgap energy, and Urbach energy is noticed. These hematite nanoparticles act as visible light photocatalyst which degrade dye in aqueous medium without the addition of any additives. The catalyst particle size, catalyst quantity, pH of dye solution, and solution temperature have significant impact on the photodegradation process of dye molecules in aq. solution. All observations advocate that green synthesis of hematite nanoparticles with Polianthes tuberosa flower extract can significantly modulate their optical and photocatalytic properties. These materials may find potential uses in water splitting for hydrogen production and purification of water by removing organic pollutants. The study highlights that using commercially cheap starting materials and extract made from naturally available plant parts, materials having huge application potentials can be synthesized at low cost by the simple green synthesis approach.