Hospital wastewater (HWW) poses a serious hazard to human health security concerning its high susceptibility to neurodegeneration. Water sources and ecosystems are exposed to a complicated pollution load from a variety of refractory organics and pharmaceutical active composites. This study evaluates the treated newly developed nanocomposite (NiFeO) HWW on the neural injury induced by HWW action in rats. Three groups of male Wistar rats were distributed, with eight rats in each: group I: tap water served as a control; group II: HWW; and group III: nano-HWW. Each group was intragastrical administrated with each type of water (2.5 ml/100 g b.wt/6 h) for 28 consecutive days. The open field test and Morris Water Maze assessed behavioral activity and spatial learning 2 days before the last day. The research demonstrated that HWW treated with nanocomposite (NiFeO) may exert decreased risks of the neural impairment effect of HWW. This improvement was achieved by reducing the neurotoxicity by lowering nitric oxide contents, lipid peroxidation, acetylcholinesterase, interleukin-17A (IL-17A), and poly(ADP-ribose) polymerase1(PARP1) while restoring the antioxidant biomarkers and neurotransmitter levels (β-endorphin, norepinephrine, dopamine, and serotonin) of the treated groups in the cortex and brainstem and enhancement of the histopathology of the cortex as well. In conclusion, this study introduced a newly developed nanotechnology application for treating HWW to protect from neural injury. The findings of this research have significant value for policymakers, Ministry of Health management, and environmental organizations in their selection of suitable techniques and procedures to optimize hospital wastewater treatment efficiency.