Iron oxide nanoparticles have been used in diverse fields due to their significant applications. The synthesis of iron oxide nanoparticles using plant material extract is a simple, inexpensive and eco-friendly approach. The present study demonstrates the effective bio-synthesis of iron oxide nanoparticles using grains extract of Echinochloa frumentacea. GC-MS analysis report revealed the information about the phytochemicals in aqueous grains extract. The formation of iron oxide nanoparticles was confirmed using UV–visible, XRD, FTIR, HRTEM, EDX, and mapping analyses. The UV–visible spectrum of iron oxide nanoparticles showed the SPR band at 289 nm. The XRD studies confirmed the formation of high crystalline iron oxide nanoparticles. HRTEM analysis showed that the formed nanoparticles were rectangular and triangular in shape and the size ranged between 20 and 40 nm. The iron oxide nanoparticles revealed significant antibacterial activity against the microbes such as Staphylococcus aureus and Salmonella typhi at 150 μg/mL and morphological changes were observed. The high concentration of nanoparticles exhibited 24 and 27 mm zone of inhibition on S. typhi and S. aureus, respectively. We observed the role of biological activities such as antioxidant, anti-inflammatory, and anti-diabetic properties of nanoparticles, and they showed excellent bioactive properties even at a low IC50 value. The antioxidant, anti-inflammatory and anti-diabetic analyses showed high activity at 95.10, 92.10 and 91.68% for 80 μg/mL concentration, respectively. Moreover, the iron oxide nanoparticles exhibited high cytotoxicity (94.36%) against A549 cancer cells and no toxicity against HEK293 normal cells which showed the biocompatibility of nanoparticles. The larvicidal and insecticidal activities of nanoparticles showed the maximum mortality at 48 h in 100 ppm and 72 h in 75, 100 μg/kg, respectively. The morphological and structural changes in larvae and insects validated the effective biological activities of iron oxide nanoparticles. The plant growth study results recommended that the lower concentration of nanoparticles at 60 ppm was helpful for the germination of seeds and growth of root and stem in the Vigna unguiculata plant. Finally, the study results suggested that the synthesized iron oxide nanoparticles can potentially be useful in pharmaceutical, agricultural, targeted drug delivery and biomedical applications.