Seven yeast isolates were screened for the remediation of indeno(1,2,3-cd)pyrene (InP) using biosynthesized iron nanoparticles and produced biosurfactant in growth medium. Four yeast isolates showed positive response to produce biosurfactant which was confirmed by drop collapse test, emulsification index, methylene blue agar plate method, oil displacement test and lipase activity. The yeast strain showing maximum potential for InP degradation and biosurfactant production was identified as Candida tropicalis NN4. The produced biosurfactant was characterized as sophorolipid type through TLC and FTIR analysis. Iron nanoparticles were biosynthesized using mint leaf extract and characterized by various instrumental analysis. Response surface methodology (RSM), three-level five-variable Box–Behnken design (BBD) was employed to optimize the factors, viz., pH (7), temperature (30 °C), salt concentration (1.5 g L −1 ), incubation time (15 days) and iron nanoparticles concentration (0.02 g L −1 ) for maximum InP degradation (90.68 ± 0.7{\%}) using C. tropicalis NN4. It was well in close agreement with the predicted value which was obtained by RSM model (90.68 ± 0.4{\%}) indicating the validity of the model. InP degradation was confirmed through FTIR and GC–MS analysis. A kinetic study demonstrated that InP degradation fitted first-order kinetic model. This is the first report on yeast-mediated nanobioremediation of InP and optimization of the whole process using RSM.