Biological synthesis of nanoparticles favors the eco-friendly development of nanotechnology. A novel approach to synthesize magnetite nanoparticles through green route has been developed. In the present study Azadirachta indica leaf extract was used as reducing and capping agent in the biosynthesis of iron oxide nanoparticles. The successful synthesis of magnetite nanoparticles was confirmed by UV-Visible spectroscopy and characterized by transmission electron microscopy, X-Ray diffraction, energy dispersive X-ray analysis, atomic force microscopy and Fourier transform infra-red spectroscopy. Stable magnetite nanoparticles of average 3-8 nm size with spherical shape were obtained. These phytogenic nanoparticles possess characteristic magnetic property and DPPH free radical scavenging activity.