Nanoparticles biosynthesis has gained great importance as an active eco-friendly method with economic benefit which overcame on other chemical and physical methods.This research involved green biosynthesis of iron oxide nanoparticles (IONPs) using Escherichia coli (E.coli) isolated from wastewater in Mosul city. Characterization of nanoparticles was performed by using many techniques which included UV-Vis Spectroscopy, Scanning Electron Microscope (SEM), Atomic Force Microscope (AFM), X-Ray Diffraction (XRD) and Fourier Transforms Spectroscopy (FTIR).Designing of a locally lab scale wastewater treatment plant was done by using IONPs adding to a dual water purification system, after tightly wrapping the filter with (1%) of IONPs solution up to saturation. Moreover, control filter was used. Sample of wastewater was passed through these filters to detect its effect on wastewater quality, the results showed that NPs filters improved physical, chemical and biological properties of wastewater including total plate count, coliform, fecal coliform and total fungi.