Magnetite (Fe3O4) nanoparticles (MPs) capped with polyethylene glycol (PEG) were prepared by a hydrothermal method, and their antibacterial activity was examined against Staphylococcus aureus, Escherichia coli and Psudomonas aeruginosa. The functionalized NPs were characterized by X-ray diffraction (XRD), transmission electron microscopy (TEM), vibrating sample magnetometer (VSM), Fourier transform infrared (FTIR) spectroscopy, and Thermogravimetry (TG). The average size of the Fe3O4 was in the range 9–20nm, while the functionalized PEG–Fe3O4 had an average size of 5–15nm. The PEG–Fe3O4 exhibited superparamagnetism and high saturation magnetization at room temperature. The antibacterial activity of the Fe3O4 and PEG–Fe3O4 were evaluated against E. coli, S. aureus, and P. aeruginosa using the agar well diffusion method. The changes in the morphology of the studied bacterial species were observed via SEM, while the mode of action of the studied agents was determined via the detection of reactive oxygen species (ROS) using Acridine orange-ethidium bromide (AO/EtBr) staining method. The results showed that PEG-functionalized magnetic (Fe3O4) NPs as a novel DNA-mediated antibacterial agent. The PEG–Fe3O4 NPs were observed to destroy the bacterial cells by permeating the bacterial nucleic acid and cytoplasmic membrane, resulting in the loss of cell-wall integrity, nucleic acid damage, and increased cell-wall permeability. The PEG–Fe3O4 NPs could serve as a potential antibacterial agent in future biomedical and pharmaceutical applications.