Background <p>Bioinspired synthesis of metal oxide nanoparticles offers and ecofriendly approach for enhancing the biomass growth and carbon fixation. However, the effect of plant mediated hematite iron oxide nanoparticles on local microalgal strains remain insufficiently explored.</p> Objectives <p>This study aimed to synthesis hematite iron oxide α-Fe₂O₃ nanoparticles (α-FeONPs) using <i>Citrus aurantiifolia</i> extract and evaluated their effects on microalgal growth, light absorption, and carbon fixation efficiency.</p> Methods <p>The synthesized nanoparticles were characterized by X-Ray Diffraction (XRD), Fourier-Transform Infrared Spectroscopy (FTIR), Scanning Electron Microscope (SEM), and Energy Dispersive X-ray analysis (EDX). The effect of nanoparticles on the growth performance, biomass accumulation, chlorophyll fluorescence parameters, and CO₂ fixation rates of <i>Dictyosphaerium</i> sp. strains (DHMI, DHMII) and <i>Chlorella sorokiniana</i> were evaluated at varying nanoparticles concentrations.</p> Results <p>XRD confirmed nanoparticles crystallinity, FTIR revealed plant derived functional group and SEM-EDX showed spherical morphology with expected elemental composition. <i>Dictyosphaerium</i> DHMII showed the highest biomass productivity (0.35 ± 0.01 g/L/d at 10 d) achieved, followed by DHMI (0.33 ± 0.01 g/L/d at 10 d), and <i>Chlorella sorokiniana</i> (0.29 ± 0.01 g/L/d at 9 d). The maximum total biomass reached 2.79, 2.64, and 2.36 g/L respectively. At 15 mg/L dose of nanoparticles DHMII and DHMI exhibited the highest CO₂ fixation rates 0.65 ± 0.03 and 0.61 ± 0.03 g/L/d. In comparison, <i>C. sorokiniana</i> showed a lower CO fixation rate. The primary photochemical efficiency (Φ_P₀) increased 33.5% <i>Dictyosphaerium</i> strains.</p> Conclusion <p>The fluorescence results suggest treatment enhances the regulation of excess energy, and oxidative stress, supporting improved microalgal productivity and carbon fixation.</p> Graphical Abstract <p></p>