In this study, we demonstrated the design and fabrication of iron oxide-embedded protonated graphitic carbon nitride (α-Fe2O3/p-g-C3N4) nanocomposites for photocatalytic dye degradation and heavy metal reduction applications under sunlight irradiation. The developed nanocomposites, with varying weight percentages of α-Fe2O3, were characterized for their structural (XRD, FTIR, XPS), optical (absorption and photoluminescence), morphological (FE-SEM, TEM), and electrochemical (EIS) properties to elucidate their structure-property relationships. The synthesis method ensures the uniform dispersion of α-Fe2O3 nanoparticles, with a particle size range of 50–60 nm, onto p-g-C3N4. XPS analysis suggests the formation of an electrical layer at the interface of α-Fe2O3/p-g-C3N4, facilitating the formation of a Z-scheme heterojunction. The photoluminescence and EIS spectra of the nanocomposite indicated effective separation and transfer of photo-induced charge carriers, aided by a reduced bandgap energy of ∼2.63 eV. Notably, the optimized 10 wt% α-Fe2O3/p-g-C3N4 nanocomposite exhibited superior photocatalytic activity, degrading nearly 100 % of crystal violate dye and reducing 98 % of Cr(VI) ions, compared to bare p-g-C3N4, which degraded around 43 % of the dye and reduced 39 % of Cr(VI) ions under sunlight irradiation. Scavenger studies indicated that α-Fe2O3/p-g-C3N4 nanocomposites produce adequate superoxide anions and hydroxyl radicals for dye degradation and heavy metal ion reduction. The composite also demonstrated consistent recyclability up to 5 cycles with around 100 % cyclical efficiency. The pH-dependent photoreduction and cyclic dye degradation by the 10 wt% α-Fe2O3/p-g-C3N4 photocatalyst indicated excellent stability, making it suitable for the treatment of multi-pollutant wastewater.