Polyaniline hollow microsphere (PNHM)/FeO magnetic nanocomposites have been synthesized by a novel strategy and characterized. Subsequently, PNHM/FeO-40 (FeO content: 40 wt.%) was used as an adsorbent for the removal of arsenic (As) from the contaminated water. Our investigations showed 98-99% removal of As(III) and As(V) in the presence of PNHM/FeO-40 following pseudo-second-order kinetics (R > 0.97) and equilibrium isotherm data fitting well with Freundlich isotherm (R > 0.98). The maximum adsorption capacity of As(III) and As(V) correspond to 28.27 and 83.08 mg g, respectively. A probable adsorption mechanism based on X-ray photoelectron spectroscopy analysis was also proposed involving monodentate-mononuclear/bidentate-binuclear As-Fe complex formation via legend exchange. In contrast to NO and SO ions, the presence of PO and CO co-ions in contaminated water showed decrease in the adsorption capacity of As(III) due to the competitive adsorption. The regeneration and reusability studies of spent PNHM/FeO-40 adsorbent showed ~83% of As(III) removal in the third adsorption cycle. PNHM/FeO-40 was also found to be very effective in the removal of arsenic (<10 μg L) from naturally arsenic-contaminated groundwater sample.