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This study synthesizes magnetic iron oxide nanoparticles from agro-waste sweet pepper extract, exploring their potential as antioxidant additives and in food preservation. Iron (III) chloride hexahydrate is the precursor, with sweet pepper extract as both a reducing and capping agent at pH 7.5. Characterization techniques, including microscopy and spectroscopy, analyze the sweet pepper extract-magnetic iron oxide nanoparticles. Antioxidant capacities against 2,2-diphenyl-1-picrylhydrazyl are assessed, incorporating nanoparticles into banana-based bioplastic for grape preservation. Microscopy reveals cubic and quasi-spherical structures, and spectroscopy confirms functional groups, including Fe–O bonds. X-ray diffraction identifies cubic and monoclinic magnetite with a monoclinic hematite presence. Sweet pepper extract exhibits 100% inhibitory activity in 20 min, while sweet pepper extract-magnetic iron oxide nanoparticles show an IC50 of 128.1 µg/mL. Furthermore, these nanoparticles, stabilized with banana-based bioplastic, effectively preserve grapes, resulting in a 27.4% lower weight loss rate after 144 h compared to the control group (34.6%). This pioneering study encourages institutional research into the natural antioxidant properties of agro-waste sweet pepper combined with magnetic iron and other metal oxide nanoparticles, offering sustainable solutions for nanopackaging and food preservation. Current research focuses on refining experimental parameters and investigating diverse applications for sweet pepper extract-magnetic iron oxide nanoparticles in varied contexts. [ABSTRACT FROM AUTHOR]