Magnetic Fe and Fe₃O₄ (magnetite) nanoparticles are successfully synthesized using Aspergillus niger YESM 1 and supercritical condition of liquids. Aspergillus niger is used for decomposition of FeSO₄ and FeCl₃ to FeS and Fe₂O₃, respectively. The produced particles are exposed to supercritical condition of ethanol for 1 hour at 300°C and pressure of 850 psi. The phase structure and the morphology measurements yield pure iron and major Fe₃O₄ spherical nanoparticles with average size of 18 and 50 nm, respectively. The crystal size amounts to 9 nm for Fe and 8 nm for Fe₃O₄. The magnetic properties are measured to exhibit superparamagnetic‐ and ferromagnetic‐like behaviors for Fe and Fe₃O₄ nanoparticles, respectively. The saturation magnetization amounts to 112 and 68 emu/g for Fe and Fe₃O₄, respectively. The obtained results open new route for using the biophysical method for large‐scale production of highly magnetic nanoparticles to be used for biomedical applications.