Metal oxide nanoparticles have been widely used in antimicrobial agents, anticancer drugs, wastewater treatment, degradation of harmful organic dyes, and other fields. In this study, iron oxide nanoparticles (IONPs) were synthesized using Brown Egyptian Propolis (BEP) extract as a reducing and stabilizing agent. The synthesized BEP-IONPs were then applied for their antibacterial activity and to remove cationic methylene blue (MB) dye from an aqueous solution. The chemical structural, morphological and optical properties of the synthesized BEP-IONPs were characterized using UV–visible spectroscopy, FTIR, XRD, XPS, SEM, TEM, and EDX. GC–MS analysis was carried out to study the chemical composition of the BEP extract. The BEP-IONPs prepared with a ratio of 1:1 and 1:2 (BEP:FeCl3) were found to be spherical, with average particle sizes of around 87 and 194 nm, respectively. The antibacterial activity was tested on gram-negative and gram-positive bacterial strains, including Escherichia coli, Pseudomonas aeruginosa, Staphylococcus aureus, and Bacillus subtilis. The results showed that the synthesized BEP-IONPs have potent antibacterial activity with a zone of inhibition of 23.5 mm for Pseudomonas aeruginosa gram-negative bacteria, and a high MB dye adsorption capacity of up to 92.7% at 210 min. The kinetics of photocatalytic degradation of MB dye by BEP-IONPs was found to follow pseudo-first-order kinetics, with a constant rate of 0.0178 min−1. Finally, the synthesized BEP-IONPs can be used effectively as antimicrobial agents against human pathogens and as photocatalysts for the removal of harmful organic dyes.