Nanoparticles of alpha ferric oxide ([Formula: see text]-Fe2O3) were prepared by the hydrothermal method. Structural properties of [Formula: see text]-Fe2O3 were determined by XRD, SEM and AFM measurements. The particles had a good matching with standard pattern. Average particle size was about 90[Formula: see text]nm and the distribution extended from about 20[Formula: see text]nm to 120[Formula: see text]nm. Biocompatibility study of ferric oxide nanoparticles against bacteria, parasites, tumor cell line and normal cells was determined. No antibacterial activity was observed for the concentration, of ferric oxide nanoparticles in distilled water, up to 1.5[Formula: see text]mg/ml vs. E. coli and S. aureus. Moreover, MTT assay was used to determine the cytotoxicity against parasites and cells. Intermediate cytotoxicity (53.30%) of 1.5[Formula: see text]mg/ml of prepared nanoparticles was noted against L. tropica, while weak cytotoxicity of 5.20% was observed against L. donovani at the same concentration of ferric oxide nanoparticles. On the other hand, the prepared nanoparticles revealed low cytotoxicity (47.28%) against SR tumor cell line, while no cytotoxicity was shown against lymphocytes, as a model of normal cells.