In the current study, iron oxide nanoparticles (IONPs) were synthesized using edible medicinal mushroom Morchella conica extract as a reducing and capping agent. Further, the Morchella conica-mediated IONPs were characterized using scanning electron microscopy (SEM), ultraviolet (UV), Fourier transform infrared (FT-IR), and X-ray diffraction (XRD). The synthesized IONPs were evaluated for antimicrobial activity against different bacterial and fungal strains and showed the highest zone of inhibition (ZIs) against bacterial and fungal strains. The maximum inhibition concentration (MIC) values for three bacterial strains Bacillus subtilis, Escherichia coli, and Klebisella pneumoniae were found to be 47 μg/mL, 94 μg/mL, and 188 μg/mL, respectively, where Klebsiella pneumonia was found to be the most resistant strain. Bacillus subtilis was reported as the least resistant strain. Among the three fungal strains, Aspergillus flavus was found to be the most resistant strain (MIC: 188μg/mL), followed by Candida albicans (MIC: 94 μg/mL), and the most susceptible strain was Mucor racemosus (MIC: 47 μg/mL). The as-prepared IONPs were further evaluated for anticancer potential, revealing an IC50 value of 41.81 μg/mL against HepG2 cancer cell lines, while the Half maximal inhibitory concentration (IC50) value of the cisplatin, used as a positive control, was recorded as 15.3 μg/mL. The antioxidant potential maximum score for IONPs was determined as 98% at 500 μg/mL, and the minimum was found as 20% at 04 μg/mL. The cytotoxic capability against brine shrimps was measured, yielding an IC50 value of 32.65 μg/mL, while vincristine sulphate demonstrated an IC50 value of 4.99 μg/mL. In conclusion, Morchella conica IONPs have shown potential bioactivities. Further, in vitro and in vivo studies are recommended to comprehensively evaluate the therapeutic potential of Morchella conica-mediated IONPs. Advancing this research toward the development of multifunctional nanoparticles (NPs) for targeted drug delivery will be essential to ensure their safety, efficacy, and clinical applicability.