Nanotechnology is a new field that has gained considerable importance due to its potential uses in the field of biosciences, medicine, engineering, etc. In the present study, bio-inspired metallic iron nanoparticles (FeNPs) were prepared using biomass of Enterobacter train G52. The prepared particles were characterized by UV-spectroscopy, TGA, XRD, SEM, EDX, and FTIR techniques. The crystalline nature of the prepared FeNPs was confirmed by XRD. The SEM techniques revealed the particles size to be 23 nm, whereas in FTIR spectra the peaks in the functional group region indicated the involvement of bioactive compounds of selected bacterial strains in the capping of FeNPs. The EDX confirmed the presence of iron in the engineered FeNPs. The FeNPs were then evaluated for its antibacterial, antifungal, antioxidant, anti-inflammatory, anti-Alzheimer’s, anti-larvicidal, protein kinase inhibition, anti-diabetic, and biocompatibility potentials using standard protocols. Substantial activities were observed in almost all biological assays used. The antioxidant, anti-cholinesterase, and anti-diabetic potential of the prepared nanoparticles were high in comparison to other areas of biological potential, indicating that the FeNPs are capable of targeting meditators of oxidative stress leading to diabetes and Alzheimer’s disease. However, the claim made needs some further experimentation to confirm the observed potential in in vivo animal models.