Global food security is challenged by population growth and the environmental toll of conventional fertilizers. Enhancing biological nitrogen fixation (BNF) in legumes like soybean (Glycine max) is a sustainable fertilization alternative. This study investigates a graphitic carbon nitride/iron oxide (Fe₂O₃/g–C₃N₄ or FC) nanocomposite as a dual–functional fertilizer to improve iron (Fe) nutrition and BNF in soybeans. A pot experiment was conducted using different FC concentrations (10, 100, and 200 mg kg⁻¹), alongside controls. Results showed that the 100 mg kg⁻¹ FC treatment (FC2) was most effective, significantly increasing soybean biomass, nodule number, and nodule fresh weight. The FC2 treatment also enhanced photosynthetic rates and chlorophyll content (SPAD values) while reducing stomatal conductance and transpiration, indicating improved water–use efficiency. Furthermore, FC application bolstered the plant’s antioxidant system by increasing the activity of superoxide dismutase (SOD) and peroxidase (POD). Elemental analysis confirmed that FC treatments significantly increased the uptake and translocation of Fe and nitrogen (N) in plant tissues. These findings demonstrate that the FC nanocomposite acts as a highly effective nanofertilizer, simultaneously addressing iron deficiency and boosting nitrogen fixation to promote soybean growth. This work highlights its potential as a sustainable solution to enhance crop productivity and nutrient use efficiency in modern agriculture.