A castor (Ricinus communis) leaf extract mediated process was developed for the synthesis of iron nanoparticles. The resultant iron nanoparticles were used as a catalyst in the transesterification of castor oil. The iron nanoparticles were characterized using UV-visible absorption spectrophotometry (UV-visible), Fourier-transform infrared spectroscopy (FTIR), X-ray diffraction (XRD), X-ray photoelectron spectroscopy (XPS), scanning electron microscopy (SEM), energy dispersive X-ray (EDX) and transmission electron microscopy (TEM). The TEM images confirm that the size of the iron nanocatalyst was in the range of 10 to 35 nm. The optimum conditions for obtaining the high yield of biodiesel were a 65 °C temperature, a 1 : 9 molar ratio of castor oil and methanol, 1 wt% catalyst loading, 150 min of reaction time and a 400 rpm stirring speed. The iron nanocatalyzed transesterification of castor oil yielded 85 ± 1% of biodiesel. The distributions of the saturated, monounsaturated and polyunsaturated fatty acid methyl esters (FAMEs) were identified as 4.11, 89.63 and 6.26%, respectively, using gas chromatography-mass spectrometry (GC-MS). The physico-chemical properties of the produced biodiesel agreed well with the ASTM standards.