Horseradish peroxidase is an enzyme commonly used in wastewater treatment due to its ability to oxidize a wide range of organic compounds, including phenols. The use of peroxidases immobilized onto magnetite nanoparticles improves the enzyme's stability and catalytic activity, but also facilitates their simply separation and reuse. In the present study, a covalent immobilization of horseradish peroxidase onto polyethylene glycol-modified magnetite nanoparticles via glutaraldehyde was performed in order to prepare a promising bio-catalyst for phenol removal from wastewater. The efficiency of the immobilized enzyme in phenol removal in the presence of hydrogen peroxide and polyethylene glycol as stabilizer was measured. The general toxicity of bio-treated water (Allium cepa test) was also investigated. All analyses were performed in parallel for the free enzyme. The immobilized enzyme showed the highest activity at a temperature of 50 °C and pH 7.0 and retained 50% of its activity after four washing cycles. Additionally, its storage stability was higher compared to the free form, as well as its tolerance against inactivation to heavy metals and organics-induced inhibition. Since the tested enzymatic system was very efficient in phenol removal from water (75% for 2 h), along with the substantial reduction of the toxicity of the tested water (48%), it can be considered as an environmentally acceptable bio-catalyst for phenol-containing wastewater treatment.