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The degradation of organic dyes poses a significant challenge in achieving sustainable environmental solutions, given their extensive usage across various industries. Iron oxide (Fe₂O₃) nanoparticles are studied as a reliable technique for remediating dye degradation. The objective of this research is to improve methods of nanomaterial-based environmental remediation. The solvothermal technique is used to synthesize carbon-modified Fe₂O₃ nanoparticles that exhibit the capability to modify their size morphology and increase reactivity, and stability for MO photodegradation. Their inherent qualities render them highly advantageous for biomedical applications, energy storage, environmental remediation, and catalysis. The mean crystallite size of the modified Fe₂O₃ nanoparticles is approximately 20 nm. These photocatalysts are tested for their ability to degrade methyl orange (MO) under Visible light radiation and in presence of hydrogen peroxide reagent. The optimal degradation efficiency (97%) is achieved with Fe₂O₃@C in the presence of H₂O₂ by meticulously controlling the pH, irradiation time, and photocatalyst dosage. The enhanced photocatalytic activity of the Fe₂O₃@C nanoparticles, compared to pure Fe₂O₃, is attributed to the conductive carbon layer, which significantly reduces electron-hole recombination rates. To summarize, Fe₂O₃@C nanoparticles not only offer a promising technique for the degradation of MO dye pollutants but also have an advantage for environmental remediation due to their increased stability and reactivity.