<p>The study aims to present a potentially sustainable strategy of using Nano-biofertilizers (NBFs) for improving plant growth and crop performance. The research investigated the effects of Iron oxide nanoparticles [Fe₂O₃ NPs (Fe-NPs)] in combination with <i>Bradyrhizobium japonicum</i> (<i>B. japonicum</i>) on the growth and physiological performance of soybean (<i>Glycine max</i>).&#xa0;First, the impact of Fe-NPs on bacterial growth was assessed, followed by seed priming with different concentrations of Fe-NPs mixed with <i>B. japonicum</i> (Fe-NBF) for different priming times to identify optimal priming conditions. The effect of priming by NBF on germination, growth, and photosynthetic performance was measured.&#xa0;The results of bacterial growth suggested that 10 mg L^− 1 concentrations of Fe-NPs with 3&#xa0;h priming were selected for further physiological studies. Soybean seeds treated with 10 mg L^− 1-NBF primed for 3&#xa0;h exhibited highest chlorophyll concentration, improved photosynthetic performance, characterised by enhanced water-splitting activity (Fv/Fo), more number of active reaction centres, better energy trapping efficiency and electron transport, ultimately resulting in a higher performance index (PI). Moreover, Fe-NBF treatment also promoted nodulation and overall plant growth much more efficiently than <i>B.japonicum</i> and Fe-NP alone.&#xa0;A mechanistic model has been provided to explain the hypothesis of mode of action of NBFs. This study demonstrates the potential of Fe-NBF as a smart fertilizer to boost photosynthetic performance and crop productivity, thereby contributing to crop improvement and sustainable agriculture.</p>