The present work is aimed at the synthesis of aluminum oxide nanoparticles (AlONPs) using the seed extract of Carica papaya. The aluminum oxide nanoparticles were evaluated using X-ray diffraction (XRD), Fourier transforms infrared (FTIR), field emission scanning electron microscopy (FESEM), energy-dispersive X-ray (EDX), ultraviolet–visible (UV–Vis) spectrophotometer, and zeta potential, respectively. This work also determines the antimicrobial and antioxidant activity of the seed extract AlONPs against pathogens such as Bacillus cereus (B. cereus), Staphylococcus aureus (S. aureus), Escherichia coli (E. coli), and Salmonella enterica (S. enterica) for antibacterial and Aspergillus niger (A. niger) for antifungal. The as-synthesized AlONPs were used for the degradation of EY dye in the presence of visible light. The presence of an absorption peak at a wavelength of 272 nm in the synthesized nanoparticles was detected by UV–Vis spectroscopy analysis. The results of the FTIR study confirmed the existence of various chemicals and functional groups in the 500–4000 cm−1 range. EDX results revealed that it included 68% aluminum and 22% oxygen established the high purity of the AlONPs. The average crystallite size of the synthesized AlONPs was found to be 52 nm by XRD analysis. Using DPPH activity, the synthesized AlONPs showed incredible antioxidant properties of 72.42% inhibition at the maximum concentration of 100 µg/ml. Moreover, it was found that the AlONPs significant antibacterial activity against tested strains viz. B. cereus (20 mm) and also showed antifungal efficacy against A. niger (30 mm) at higher concentrations of AlONPs. The photocatalytic degradation of the dye through the utilization of the synthesized AlONPs was clearly evident through the observation of a shift in color of the Eosin Y dye, transitioning from a deep pink hue to a nearly colorless state after exposure to UV light for 300 min. The green synthesized AlONPs show high photocatalytic degradation of EY 91.41% after 300 min under visible light irradiation. The current investigation has demonstrated that the seed extract of Carica papaya serves as a significant resource for the synthesis of AlONPs through a biological, eco-friendly, and non-toxic approach, while also possessing antibacterial, antioxidant, and photocatalytic properties.