The rapid advancement of chemical, pharmaceutical, and other process industries has resulted in the increasing generation of highly toxic organic wastewater. To address this pressing environmental challenge, this study presents a novel pollutant treatment strategy: a magnetic α-Fe2O3 photocatalyst doped with carbon quantum dots (CQDs), synthesized via a single-step hydrothermal method using algal blooms as a sustainable carbon source, was successfully developed for sunlight-driven photo-Fenton degradation of real-world organic wastewater. Under a H2O2 concentration of 0.0485 mol/L, nearly 100 % removal of Rhodamine B (RhB) was achieved within 30 min. The degradation performance of α-Fe2O3/CQDs was further evaluated using both natural sunlight and a laboratory xenon lamp. Computational analysis based on density functional theory (DFT) revealed that the incorporation of CQDs significantly enhanced the transfer efficiency of photogenerated charge carriers within the α-Fe2O3 structure. Additionally, mung bean germination experiments confirmed that the biological toxicity of actual organic wastewater was markedly reduced after sunlight-induced degradation, thereby meeting discharge standards for subsequent biological treatment processes. This study presents a novel, economically viable, and environmentally sustainable approach for developing magnetic, recyclable, and practical photo-Fenton catalysts using natural biochar materials, providing valuable insights into the treatment of complex real-world organic wastewater.