Nanoparticles have great impact due to their tremendous industrial applications. However, their applications have produced toxicity effects on the aquatic environments and their detailed analyses are not clearly understood. Iron oxide nanoparticles (Fe2O3 NPs) are being used extensively in many industries but are considered highly toxic to aquatic species residing in surface waters. This paper demonstrates the acute toxicity of alpha-Fe2O3 and gamma-Fe2O3 NPs in two aquatic species. The effects of various concentration (0, 50, 100, 250, 500 and 1000 mg/L) of alpha-Fe2O3 and.-Fe2O3 on the sensitivity response of the Chlorella sp. and D. magna were investigated. The growth of microalgal decreased with increased concentration of the alpha-Fe2O3 and gamma-Fe2O3 NPs concentrations but did not show a significant toxic effect. The EC50 concentration value was 500 mg/L and LD50 concentration value was 1000 mg/L for alpha-Fe2O3 treated daphnids in 72 h, respectively. The findings demonstrate the significant evidence in understanding acute toxicity of Fe2O3 NPs for environmental protection as part of risk assessment strategies.