Aluminum oxide nanoparticles (AlO NPs) were synthesized using a simple, eco-friendly green synthesis approach in an alkaline medium from the extract of grapefruit peel waste. The pre-synthesized, nano-crystalline AlO NPs were characterized by using spectroscopic (UV-vis, FTIR, XRD, and EDX) and microscopic (SEM and TEM) techniques. The formed AlO NPs exhibited a pronounced absorption peak at 278 nm in the UV-vis spectrum. The average particle size of the as-prepared AlO NPs was evaluated to be 57.34 nm, and the atomic percentages of O and Al were found to be 54.58 and 45.54, respectively. The fabricated AlO NPs were evaluated for antioxidant, anti-inflammatory, and immunomodulatory properties. The AlO NPs showed strong antioxidant potential towards all the four tested assays. The anti-inflammatory and immunomodulatory potential of AlO NPs was investigated by measuring the production of nitric oxide and superoxide anion (O), as well as proinflammatory cytokines tumour necrosis factor (TNF-α, IL-6) and inhibition of nuclear factor kappa B (NF- κB). The results revealed that AlO NPs inhibited the production of O (99.4%) at 100 μg mL concentrations and intracellular NO (55%), proinflammatory cytokines IL-6 (83.3%), and TNF-α (87.9%) at 50 μg mL concentrations, respectively. Additionally, the AlO NPs inhibited 41.8% of nuclear factor kappa B at 20 μg mL concentrations. Overall, the outcomes of current research studies indicated that AlO NPs possess anti-inflammatory and immunomodulatory properties and could be used to treat chronic and acute anti-inflammatory conditions.