The impact of bio-remediation agent nZVI on environment is still inadequately understood, especially on aquatic food web. The study presented here has therefore considered both chemical (CS) and biological (BS) synthetic origins of nZVI and their effects on both algae and daphnia. The study is unique in its attempt to explore the possibility of trophic transfer from algae to its immediate higher niche (daphnia as the model). An equal weightage of the effects of both CS and BS nZVI on algae and daphnia has been explored here; hence it allows us to compare the capping of nZVI on toxicity. To examine the causes of observed lethality- ROS generation, effects on the activity of oxidative enzymes, membrane damage and biouptake of nZVI was analysed. The overall outcome of CS and BS nZVI on lethality was significantly different in algae and daphnia, where daphnia demonstrated relatively higher sensitivity against CS nZVI. Algae demonstrated considerable differences in CS and BS nZVI toxicity only at higher concentration. This study did not show a probable biomagnification and trophic transfer from algae to daphnia under the experimental conditions even at the highest exposure concentration. The study instigates the importance of trophic transfer to understand the possible biomagnification of nZVI among organisms of different trophic levels and eventually the consequences on environment. © 2016 Elsevier B.V.