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The textile and leather industry produces large amounts of wastewater that contains high levels of chemicals and other pollutants, incorporated during the processing stages. We evaluated the efficacy of green synthesized iron oxide (α-Fe2O3) and magnesium oxide (MgO) nanoparticles (NPs) for wastewater treatment of crude textile and tannery effluents. Green synthesis of α-Fe2O3-NPs and MgO-NPs was conducted using the newly obtained Aspergillus carbonarious strain D-1. The optimization of the physicochemical parameters for the biosynthesis of NPs, including incubation periods, contact time, pH, temperature, and precursor concentrations, were assessed. The characterization of NPs obtained under optimal conditions was evaluated using UV–visible spectroscopy, transmission electron microscopy (TEM), X-ray diffraction (XRD) patterns, dynamic light scattering (DLS), and Fourier Transform Infrared (FT-IR) Spectroscopy. The optimal concentration for efficient textile/tannery wastewater decolorization was determined to be 100 mg NPs after eight hours for α-Fe2O3-NPs and after four hours for MgO-NPs. Under these conditions, chemical oxygen deman (COD), pH value, total dissolved solids (TDS), total suspended solids (TSS), and conductivity were greatly reduced as compared to control for crude textile wastewater. GC–MS analysis of NPs-treated textile wastewater revealed that some major compounds were greatly diminished, bio-transformed, or completely degraded. MgO and α-Fe2O3 NPs exhibited a high capacity to reduce the COD of tannery wastewater by 97.5% and 95.0%, respectively. Hematite NPs exhibited higher removal capacity for TDS, TSS, and conductivity compared to MgO-NPs. MgO and hematite NPs exhibited high capacities to remove Cr, with MgO redcing Cr by 87.06 and hematite NPs reducing Cr by 75.4%. MgO-NPs were more effective than α-Fe2O3-NPs at removing Pb, Ni, and Cd.