Metal nanostructures have potential effective impacts with many arenas like catalysis, sensors, optics, electronics, functional materials, environment and medicine. Thus, iron nanoparticles (FeNPs) were mycogenic synthesized in this study as effective antimicrobial agent and heavy metals removers. The isolation of 37 fungi were done from contaminated 10 soil (with iron ions or metals) samples and they screened. The most powerful fungal isolate was Fusarium oxysporum. Biosynthesized FeNPs size were 0.7 to 3 nm (high small size) with spherical shape based on TEM analysis. However, XRD, FT-IR analyses confirmed that characterization and led to form iron at zero valent. The obtained FeNPs were used as antibacterial agent against broad spectrum of environmental pathogens with minimum amounts (about 20 µg/ml) compared with reference antibiotics. This drive for using it to control microbial pathogens through municipal wastewater. For its high adsorption activity, it is used for removing heavy metals from their contaminated wastewater.