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The cold extraction method was used to obtain the aqueous extract of Vitex leucoxylon leaves in a ratio of 1:10. Iron nanoparticles (FeNPs) were synthesized using aqueous leaf extract of V. leucoxylon as a reducing agent. The phytoreducing approach was used to make FeNPs by mixing 1 mL of plant extract with 1 mM of ferric sulfate. Scanning electron microscopy (SEM), Fourier-transform infrared spectroscopy (FTIR), Ultraviolet–visible spectroscopy (UV-Vis), and energy-dispersive X-ray spectroscopy were used to examine the synthesized FeNPs. The reducing reaction was shown by a change in the color of the solution, and the formation of black color confirms that FeNPs have been formed. The greatest absorption peak (max) was found at 395 nm in UV-Vis spectral analysis. The FTIR spectra of V. leucoxylon aqueous leaf extract showed shifts in some peaks, namely 923.96 cm−1 and 1709.89 cm−1, with functional groups carboxylic acids, unsaturated aldehydes, and ketones, which were lacking in the FTIR spectra of FeNPs and are responsible for FeNPs formation. FeNPs with diameters between 45 and 100 nm were observed in SEM images. The creation of FeNPs was confirmed by EDX, which shows a strong signal in the metallic iron region at 6–8 Kev. XRD revealed a crystalline nature and an average diameter of 136.43 nm. Antioxidant, anti-inflammatory, cytotoxic, and wound healing in vitro tests reported significant activity of the FeNPs. The cumulative findings of the present study indicate that the green synthesis of FeNPs boosts its biological activity and may serve as a possible dermal wound-healing agent and cytotoxic agent against cancer. Future study is needed on the identification of mechanisms involved in the synthesis of FeNPs by V. leucoxylon and its biomedical applications.