For preparation of nano-composite (iron oxide nanoparticles coated by TiO2) sol-gel method was used. The difference between iron oxide nanoparticles and iron oxide nanoparticles coated by TiO2, which had an antibacterial effect and ability to remove heavy metals was discussed. The nano-sized particles of prepared metal nanoparticles were about 55-65 nm for the two types. Different characterization instruments such as X-ray diffraction (XRD) analysis; scanning electron microscopy (SEM), FT-IR, particle size analyzer and VSM were used to know the magnetic properties of prepared nano-composites. The antibacterial effect of two types of nano-composite were investigated against pathogenic bacteria, which illustrated that nanoparticles had moderate antibacterial activity against both gram-positive and gram negative pathogenic bacterial strains, maintains pharmaceutical and biomedical industries application. High reduction percent of antibacterial activity was shown after 30 min by 150 mg/ml of nanoparticles prepared. Also, the elevated inhibition percent was obtained due to removal of aluminum and iron ions from poisoned water and decreasing effect of COD and BOD concentrations with reducing total nitrogen percent.