Neurogenesis is the process by which new brain cells are formed. This crucial event emerges during embryonic life and proceeds in adulthood, and it could be influenced by environmental pollution. Non-combustion-derived magnetite represents a portion of the coarse particulate matter (PM) contributing to air and water pollution in urban settings. Studies on humans have reported that magnetite and other iron oxides have significant damaging effects at a central level, where these particles accumulate and promote oxidative stress. Similarly, magnetite nanoparticles can cross the placenta and damage the embryo brain during development, but the impact on neurogenesis is still unknown. Furthermore, an abnormal Fe cation concentration in cells and tissues might promote reactive oxygen species (ROS) generation and has been associated with multiple neurodegenerative conditions. In the present study, we used zebrafish as an in vivo system to analyze the specific effects of magnetite on embryonic neurogenesis. First, we characterized magnetite using mineralogical and spectroscopic analyses. Embryos treated with magnetite at sub-lethal concentrations showed a dose–response increase in ROS in the brain, which was accompanied by a massive decrease in antioxidant genes (sod2, cat, gsr, and nrf2). In addition, a higher number of apoptotic cells was observed in embryos treated with magnetite. Next, interestingly, embryos exposed to magnetite displayed a decrease in neural staminal progenitors (nestin, sox2, and pcna markers) and a neuronal marker (elavl3). Finally, we observed significative increases in apoeb (specific microglia marker) and interleukin-1b (il1b), confirming a status of inflammation in the brain embryos treated with magnetite. Our study represents the very first in vivo evidence concerning the effects of magnetite on brain development.