The present study compared the effects of iron nanoparticles (FeNPs) and FeCl₃ on the growth, nitrogenase activity, and H₂ production of mesophilic bacteria Enterobacter aerogenes and Bacillus thuringiensis. FeNPs were synthesized using the forcing-hydrolysis method of ferric chloride. The synthetic FeNPs exhibited a distinct peak in the surface plasmon resonance at 350 nm and irregularly shaped particles ranging in size from 33 nm to 50 nm. X-ray diffraction (XRD) analysis confirmed that the synthesized FeNPs matched the hematite database (JCPDS file No. 19–629). The growth of E. aerogenes and B. thuringiensis was significantly higher in the presence of FeNPs than in the presence of FeCl₃. The highest growth rate was observed at an FeNP concentration of 150 mg/L. Nitrogenase activity in both E. aerogenes (2.6-fold increase) and B. thuringiensis (2.4-fold increase) was higher when FeNPs were present compared to control cultures without iron addition. The study also investigated the effects of FeCl₃ and FeNPs on H₂ generation by Enterobacter and Bacillus using orange peel hydrolysate and molasses as substrates. The results showed that Supplementation of 6% orange peel hydrolysate with 150 mg/L of FeNPs significantly increased cumulative H₂ generation, resulting in a yield of 1.92 mol H₂/mol glucose in Enterobacter aerogenes. Similarly, in Bacillus thuringiensis, the cumulative H₂ produced from 6% molasses supplemented with 150 mg/L FeNPs was 2.36 mol H₂/mol glucose. These findings suggest that FeNP supplementation, rather than FeCl₃ supplementation, can enhance the bioactivity of H₂-producing bacteria and improve H₂ yield. This has significant implications for the economic importance and feasibility of biofuel technologies that utilize industrial waste products.