The magnetic iron nanoparticles (MFeNp) were biosynthesised using the extract of Cinnamomum tamala (bay leaf) and examined for its efficacy on sludge dewatering. The characteristics of MFeNp were studied using scanning electron microscope (SEM), transmission electron microscopy (TEM), x-ray diffraction (XRD), Fourier transform infrared spectroscopy (FTIR) and x-ray photoelectron spectrometer (XPS) techniques. The presence of polyphenolic compounds were confirmed by FTIR and XPS analysis. The reduction in capillary suction time (CST) (71.36 to 16.5 s) and specific resistance to filtration (SRF) (53.71 × 1011 to 1.47 × 1011 m/kg) values have indicated that the use of Fenton nanocatalyst enhanced the sludge dewaterability. The differential scanning calorimetry (DSC) analysis has shown that the mass of bound water in the treated sludge was decreased significantly from 1.45 to 0.92 kg H2O/kg DS. The breakdown of extracellular polymeric substances (EPS) by the MFeNp leads to the significant reduction in proteins, polysaccharides, water content and heavy metals. The optimisation using response surface modelling (RSM) have shown that the maximum removal efficiency of water from the sludge was 85.9 % when the optimum pH (3) MFeNp dosage (50 mg/g DS) and H2O2 dosage (500 mg/g DS) were maintained. The experimental results and the statistical optimisation have suggested that MFeNp can be used as a potential nanocatalyst for the sludge dewaterability and hence it can be used for the agricultural purpose. [Figure not available: see fulltext.] © 2016, Springer-Verlag Berlin Heidelberg.