Bioconversion of Fe3+ to Fe0 followed by spindle shaped magneto-fluorescent nanoiron production has been investigated using Arthrospira platensis as a potential bio-reagent. The characteristic features, e.g. in situ localisation, magnetic and fluorescent properties of synthesised nanoparticles, were explored. Bioconversion occurred when healthy growing biomass of Arthrospira platensis was exposed to 0.01 M aqueous solution of FeCl3 for 96 h at 25 °C with pH5.2. Spindle-shaped nanoiron was synthesised both inside and outside the cells. The average dry and hydrodynamic sizes for intracellular particles were 24.26 ± 3.40 nm × 5.45 ± 1.66 nm and 175.9 nm, respectively; whereas size variation for extracellular particles was 23.62 ± 3.49 nm × 8.41 ± 4.33 nm and 40.02 nm, respectively, as observed using transmission electron microscopy (TEM) and dynamic light scattering (DLS) analysis, respectively. Further characterisations were conducted using scanning electron microscopy (SEM), Fourier transform infrared (FTIR) spectroscopy, energy dispersive X-Ray spectroscopy (EDX), and X-Ray diffraction analysis (XRD). Nonspherical nanoiron particles generated multiple absorption bands at approximately 230, 350, and 480 nm in the UV-Vis spectra. Fluorescence of nanoiron was detected using confocal microscopy both inside and outside cells employing a blue filter (λex–425 nm, λem–475 nm). The magneto-fluorescent nature of synthesised nanoiron was estimated using fluorimetric analysis and dynamic light scattering study using a 0.5-tesla static magnetic field (SMF) at 4 °C. The investigation showed that the static magnetic field induced non-invasive clustering effect of nanoiron directly influence fluorescence intensity and its lifetime. The presence of superparamagnetism was detected in iron nanoparticles using a superconducting quantum interference device-vibrating sample magnetometer (SQUID-VSM). © 2021 International Phycological Society.